Deck 46: Amalgamation, Llp, and Single Entry System

Question 1

On amalgamation, Share issue Expenses A/c appearing on Assets side of the balance sheet of the vendor company

A)is closed by debit to Realisation A/c
B)is closed by debit to Equity Shareholders A/c
C)is closed by debit to Profit & Loss A/c
D)is closed by credit to Equity Shareholders A/c

Answer 1

is closed by debit to Equity Shareholders A/c

Question 2

On amalgamation, if the dissolution expenses are paid as well as borne by the purchasing company

A)Entries are passed in the books of the purchasing as well as the vendor company
B)no entry is passed in the books of the vendor company
C)no entry is passed in the books of the purchasing company
D)no entry is passed in the books of the purchasing as well as the vendor company

Answer 2

no entry is passed in the books of the vendor company

Question 3

Amalgamation adjustment reserve is opened in the books of transferee company to incorporate

A)The assets of the transferor company
B)The liabilities of the transferor company
C)The statutory reserves of the transferor company
D)Goodwill of Transferor company

Answer 3

The statutory reserves of the transferor company

Question 4

Loss or profit on realisation a/c is transferred by the transferor company, under amalgamation to

A)Preference shareholders a/c
B)Equity Shareholders Account
C)Profit & loss appropriation a/c
D)Debentureholders Account

Question 5

If two or more company come together and form anew company which takes over the assets and liabilities of the vendor companies it is called as

A)external reconstruction
B)Internal Reconstruction
C)absorption
D)Amalgamation

Question 6

At least of the designated partners of every limited liability partnership shall be a resident in India.

A)One
B)Two
C)Three
D)Seven

Question 7

_________________is a person who is designated as such in the incorporation documents of the limited liability partnership agreement

A)Director
B)Manager
C)Designated Partner
D)Partner

Question 8

The Charter document or the formation document of LLP is called as          

A)Memorandum
B)articles of association
C)LLP agreement
D)Partnership agreement

Question 9

If there is conversion of private limited company into LLP all the of the company must become partners in the LLP and no one else

A)Shareholders
B)Employees
C)Managers
D)Vendors

Question 10

Prepaid expenses are shown under

A)Loans and advances asset side
B)Loans and advances liability side
C)In the p and L account
D)They are ignored

Question 11

In absence of LLP agreement the mutual rights of partners and the relation to LLP will be determined as per schedule _of LLP Act 2008

A)I
B)II
C)III
D)IV

Question 12

In Single entry mostly:

A)Personal aspects of transaction are recorded
B)Nominal aspects of transaction are recorded
C)Real aspects of transaction are recorded
D)All of the above

Question 13

Statements of assets & liabilities prepared under single entry system is called:

A)Balance sheet
B)Profit & loss statement
C)Statement of affairs
D)Income Statement

Question 14

Normally single entry system is suitable for:

A)Small scale business
B)Large scale business
C)Both of them
D)None of them

Question 15

If Building (closing) Rs.100,000, Land (opening) Rs. 100,000, Creditors (opening) Rs.10,000 then opening capital:

A)Rs. 190,000
B)Rs. 210,000
C)Rs. 90,000
D)None of these

Question 16

If opening capital is Rs.10,000 & closing capital is Rs.15,000 then profit or loss:

A)Loss of Rs.5,000
B)Profit of Rs.2,500
C)Profit of Rs.5,000
D)None of these

Question 17

In single entry two-fold aspect of transaction are not recorded, so it is:

A)Complete and Scientific
B)Incomplete and Unscientific
C)Complete and Unscientific
D)Incomplete and Scientific

Question 18

In single entry system profit is calculated by:

A)Opening capital + Drawing - Fresh Capital - Closing Capital
B)Closing capital + Drawing + Fresh Capital - Opening Capital
C)Closing capital - Drawing + Fresh Capital - Opening Capital
D)Closing capital + Drawing - Fresh Capital - Opening Capital

Question 19

Opening capital is obtained by preparing:

A)Debtors account
B)Creditors account
C)Opening statement of affairs
D)Cash account

Question 20

Single entry system contains

A)All the relevant accounts
B)Only personal accounts
C)Real accounts only
D)Personal account and cash book

Question 21

In the case of net worth method of single entry system, the net profit is ascertained by

A)preparing a Trading and Profit & Loss Account
B)comparing the capital in the beginning and at the end of the accounting period
C)adopting another method
D)none of the above

Question 22

The amount of credit purchases can be ascertained by preparing a

A)Total Creditors Account
B)Memorandum Trading Account
C)Opening Statement of Affairs
D)Closing Statement of Affairs

Question 23

When closing capital is less than opening capital, it denotes

A)profit
B)loss
C)profit, if there is no introduction of fresh capital
D)no profit-no loss

Question 24

Businessmen may intentionally not maintain proper accounts

A)to evade taxation.
B)to prevent themselves from destruction of books due to uncertainty.
C)as they are ignorant of the legal entity assumption.
D)as they are ignorant of the double entry accounting principles.