Top 50+ Solved Accounting for Amalgamation, Absorption and External MCQ Questions Answer
Q. In external liquidations, there is one liquidation and one ………………
a. Formation
b. Merger
c. Demerger
d. Purchase consideration
Q. When two or more companies carrying on similar business decide to combine, anew company is formed, it is known as ..................
a. Amalgamation
b. Absorption
c. Internal reconstruction
d. External reconstruction
Q. When one of the existing companies take over business of another company or companies, it is known as ...........
a. Amalgamation
b. Absorption
c. Internal reconstruction
d. External reconstruction
Q. Which of the following statement is correct?
a. The amount of Goodwill or Capital Reserve is found out in the books of purchasing company only
b. The amount of Goodwill or Capital Reserve is found out in the books of vendor company only.
c. Goodwill = Net Assets – Purchase price (
d. The face value of shares of purchasing company will be taken in to account while calculating purchase consideration.