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Test: Amalgamation Of Companies - B Com MCQ


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10 Questions MCQ Test Advanced Corporate Accounting - Test: Amalgamation Of Companies

Test: Amalgamation Of Companies for B Com 2024 is part of Advanced Corporate Accounting preparation. The Test: Amalgamation Of Companies questions and answers have been prepared according to the B Com exam syllabus.The Test: Amalgamation Of Companies MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Amalgamation Of Companies below.
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Test: Amalgamation Of Companies - Question 1

What is the term used when two or more existing companies decide to liquidate their business and establish a new company to acquire their assets and liabilities?

Detailed Solution for Test: Amalgamation Of Companies - Question 1
Amalgamation is the process in which two or more existing companies decide to liquidate their businesses and form a new company to acquire their assets and liabilities.
Test: Amalgamation Of Companies - Question 2

In an amalgamation, when does a new company pay consideration to acquire the business of the amalgamating companies?

Detailed Solution for Test: Amalgamation Of Companies - Question 2
The newly formed company pays the purchase consideration after the liquidation of the amalgamating companies.
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Test: Amalgamation Of Companies - Question 3

Which method is used to calculate purchase consideration in an amalgamation?

Detailed Solution for Test: Amalgamation Of Companies - Question 3
The purchase consideration can be calculated using different methods, and one of them is the Net Asset Method.
Test: Amalgamation Of Companies - Question 4
In an amalgamation in the nature of merger, what percentage of shareholders' equity shares should agree to become shareholders in the new company?
Detailed Solution for Test: Amalgamation Of Companies - Question 4
In an amalgamation in the nature of merger, shareholders holding at least 90% of the face value of the equity shares of the transferor company should agree to become shareholders in the new company.
Test: Amalgamation Of Companies - Question 5
What happens to the balance of Profit and Loss Account of the transferor company in an amalgamation in the nature of merger?
Detailed Solution for Test: Amalgamation Of Companies - Question 5
In an amalgamation in the nature of merger, the balance of the Profit and Loss Account of the transferor company is merged into the balance of the Profit and Loss Account of the transferee company.
Test: Amalgamation Of Companies - Question 6
What type of reconstruction involves creating a new company to take over the business of a company in financial crisis?
Detailed Solution for Test: Amalgamation Of Companies - Question 6
External reconstruction involves creating a new company to take over the business of a company facing financial difficulties.
Test: Amalgamation Of Companies - Question 7
What is the primary reason for performing an internal reconstruction of a company?
Detailed Solution for Test: Amalgamation Of Companies - Question 7
Internal reconstruction is primarily done to reorganize a company's financial structure, often including reducing share capital to eliminate accumulated losses.
Test: Amalgamation Of Companies - Question 8
Which type of amalgamation involves the pooling of assets, liabilities, and reserves, and ensures that shareholders of the transferor companies retain a substantial share in the equity of the transferee company?
Detailed Solution for Test: Amalgamation Of Companies - Question 8
Amalgamation in the nature of merger involves the pooling of assets, liabilities, and reserves, and ensures that shareholders of the transferor companies retain a substantial share in the equity of the transferee company.
Test: Amalgamation Of Companies - Question 9
In an amalgamation in the nature of purchase, how are the assets and liabilities of the transferor company recorded by the transferee company?
Detailed Solution for Test: Amalgamation Of Companies - Question 9
In an amalgamation in the nature of purchase, the assets and liabilities of the transferor company are recorded by the transferee company at both book value and fair value, as necessary.
Test: Amalgamation Of Companies - Question 10
What does the term "Amalgamation in the nature of purchase" refer to?
Detailed Solution for Test: Amalgamation Of Companies - Question 10
"Amalgamation in the nature of purchase" refers to a type of amalgamation where not all the conditions required for a merger are met, resulting in a different form of combination.
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