TYBCOM SEM 5 || Advance Accounting - MCQ of Holding company
Videos: Holding company account MCQ
1. At the time of …………………, inter company debts and acceptances are to be
cancelled out.
A. Merger
B. Absorption.
C. Internal reconstruction.
D. Consolidation.
Ans: D. Consolidation.
2. Inter- company dividends are ……………………..to the cost of investment in the
subsidiary company for calculating goodwill or capital reserve.
A. Added
B. Deducted
C. Remove
D. None of the above.
Ans: B. Deducted
3. Holdings of minority will …………………by the number of bonus shares received by
them.
A. Increase
B. Decrease
C. Remain same
D. None of the above
Ans: A. Increase
4. Out of the unrealized profits, a holding company’s share is reduced from the stock and
A. Profit & Loss A/C
B. Goodwill.
C. Minority Interest
D. Capital A/C
Ans: A. Profit & Loss A/C
5. Investments made by a holding company in a subsidiary company are always to be
shown in ……………….
A. Profit & Loss A/C
B. Consolidated Balance Sheet.
C. Minority Interest.
D. Dividend A/C
Ans: B. Consolidated Balance Sheet.
6. If AB Ltd buys more than 50% of the shares in CD Ltd then which of the following
statements accurately summarizes the relationship between these two firms?
A. AB Ltd is a subsidiary undertaking of CD Ltd
B. CD Ltd is the parent undertaking
C. AB Ltd is the parent undertaking
D. There is no significant financial relationship between the two
Ans: C. AB Ltd is the parent undertaking
7. On a consolidated balance sheet, if the shares of a company have been bought for
more than the balance sheet value then the difference would appear as:
A. Goodwill
B. Capital reserve
C. Loss on purchase
D. Profit on purchase
Ans: A. Goodwill
8. Pre-acquisition profit in subsidiary company is considered as:
A. Revenue Profit
B. Capital Profit
C. Goodwill
D. None of the above
Ans: B. Capital Profit
9. Profit earned after acquisition of share is treated as:
A. Revenue Profit
B. Capital Profit
C. Goodwill
Ams: D. None of the above.
Ans: A. Revenue Profit
10. Profit earned before acquisition of share is treated as:
A. Revenue Profit
B. Capital Profit
C. Goodwill
D. Revaluation Profit
Ans: B. Capital Profit
11. Preparation of consolidated statements as per AS 21 is :
A. Optional
B. Mandatory for All
C. Mandatory for listed companies.
D. Mandatory for PVT. companies.
Ans : C. Mandatory for listed companies.
12. Face value of debentures of subsidiary company, held by holding co.is deducted
from:
A. Debentures
B. Cost of Control
C. Minority Interest.
D. Goodwill.
Ans:B. Cost of Control
13. Minority Interest includes:
A. Share in share capital
B. Share in capital profit
C. Share in revenue profit
D. All of the above.
Ans: D. All of the above.
14. Preparation of Holding Companies Accounts Deals with :
A. AS-22
B. AS-21
C. AS-25
D. AS-12
Ans: B. AS-21
15. The time interval between the date of acquisition if shares in subsidiary company
and date of balance sheet of holding company is known as :
A. Pre-acquisition period
B. Post -acquisition period.
C. Pre- commencement period
Ans: B. Post -acquisition period.
Consolidated if holding company
1. Minority interest should be presented in the consolidated balance sheet
(a) As a part of liabilities
(b) As a part of equity of the parent’s shareholders
(c) Separately from liabilities and the equity of the parent’s shareholders
2. Minority of the subsidiary is entitled to
(a) Capital profits of the subsidiary company
(b) Revenue profits of the subsidiary company
(c) Both capital and revenue profits of the subsidiary company
3. In consolidation of accounts of holding and subsidiary company _________ is
eliminated in full.
(a) Current liabilities of subsidiary company
(b) Reserves and surplus of both holding and subsidiary company
(c) Mutual indebtedness.
4. In consolidated balance sheet, the share of the outsiders in the net assets of
the subsidiary must be shown as
(a) Minority interest
(b) Capital reserve
(c) Current liability
5. Taxation provision made by the subsidiary company will appear in the
consolidated balance sheet as an item of
(a) Current liability.
(b) Revenue profit.
(c) Capital profit.
6. Issue of bonus shares by the subsidiary company out of capital profits will
(a) Decrease cost of control.
(b) Increase cost of control.
(c) Have no effect on cost of control.
7. Dividend paid by subsidiary to its parent, out of capital profits, should be
credited by the parent company in its
(a) Profit and loss account.
(b) Dividend account.
(c) Shares invested in subsidiary account.
1. (c); 2. (c); 3. (c); 4. (a); 5. (a); 6. (c);
7. (c)
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