CORPORATE ACCOUNTING 

Assignment- A
Q1. Define the term “Accounting Standards”.

Q2. Explain the clauses related to the maintenance of books of accounts and annual return maintained by the companies.

Q3. What do you mean by Right Issue of Shares?

Q4. Write short notes on–Marked and Un-Marked Application.

Q5. What is debenture? Explain its different classes.

Q6. What journal entries are passed in the books of Transferor Company and Transferee Company regarding amalgamation/absorption?

Q7. What do you mean by a holding company? Explain the circumstances under which one company controls the other.

Q8. What do you understand by Liquidator’s Statement of Account? When it is prepared and how?

Assignment- B
Case Study
On 1st January, 2002 Sanju Limited issued ` 6, 00,000; 12% Debentures redeemable after 10 years at par. The company established a non-cumulative sinking fund for their redemption. The sinking fund moneys were to remain the business or invested in 8% trustee securities at the discretion of the directors. During the first five years, the amount transferred to sinking fund and investments made were as under: Year Amount transferred to Sinking Fund Amount Invested
2000 40,000 8,000
2001 60,000 40,000
2002 40,000 50,000
2003 80,000 Nil
2004 Nil 30,000
Q1. You are required (a) to prepare necessary accounts for the first five years

Q2. To show these accounts in the balance sheet of at the end of 2004

Q3. To state briefly how the amount of the sinking fund would be disposed of when the debentures have been paid off.

Assignment C:
1 Register of buy back of shares is …………………..
Not open for inspection
Open for inspection
Not open for authentication
Not preserved

2 Which of the following types of income is not specifically exempt from income tax?    
Statutory redundancy pay
Income from Individual Savings Accounts
Any benefit in kind provided to employees by an employer
Income from National Savings Certificates

3 Entries in the register of members will be made in …………………from the date of approval of allotment, Transfer of share, debentures or any other securities.    
Thirty days
Four days
Seven days
None of the above

4 The register of debenture holder should be preserved for a period of …………….from the date of redemption of debentures.    
10 years
5 years
8 years
15 years

5 ……………deals with Accounting for Amalgamations        
AS 24
AS 14
AS 4
AS 20

6 Entries in the register should be authenticated by the …………….of the company or by any other person authorized by the Board for the purpose.    
Secretary
Director
Trustee
Employee

7 All contracts entered into by a company for the appointment of a manager or managing director shall be…………………..        
Open for preservation
Open for inspection
Open for authentication
None of the above

8 The register of director’s shareholding should be preserved…………………    
For 15 years
For 8 years
For 5 years
Permanently

9 Register of buy back of shares should be preserved for a minimum period of ………………..from the date of completion of buyback.    
8 years
5 years
15 years
None of the above

10 Minimum subscription has been determined at ___________ of the total issue.    
90%
50%
55%
45%

11 The gain on reissue of forfeited shares is credited to:    
General Reserve
Capital Reserve
Revenue Reserve
Capital Redemption Reserve

12 Premium on issue of shares can be utilized for:    
The distribution of dividend
Redemption of Debentures
Writing off the premium payable on redemption of preferential shares
Paying fees to the directors.

13 A company limited by shares is not permitted to return the share money to its shareholders except in the case of it’s:        
Winding up
Merger
Acquisition
Promotion

14 Where the issuing company is a ……………..company then the provisions of Section 81 do not apply.    
Private limited
Public limited
Foreign
Personal

15 Premium on redemption of debenture account is:    
A real account
A nominal account-income
A personal account
A nominal account- expenditure

16 Which of the following debentures is transferred by transfer deed only?    
Bearer debenture
Registered debenture
Mortgage Debenture
Both a and b

17 If there is any balance in Debenture Redemption Fund that will be transferred to:
Profit and Loss Account
General Reserve
Capital Reserve
None of the above

18 Profit on cancellation of debentures is transferred to:    
Profit and Loss Account
Sinking Fund Account
Capital Reserve
All of the above

19 Debenture-holders are entitled to get _________________ at a fixed rate.    
Interest
Dividend
Security
Fixed dividend

20 Debentures can be redeemed out of:    
Profits
Capital
Provisions made for redemption
All of the above

21 When an underwriter makes an agreement to take a certain number of shares, it is called:    
Sub underwriting
Partial underwriting
Firm underwriting
Syndicate underwriting

22 Pre-incorporation loss must be transferred to:        
Capital reserve
Goodwill
General reserve
Dividends to members

23 For what purpose the pre-incorporation profits are used:    
To distribute dividend
To write off goodwill
To write off discount on issue of shares
To make a reserve

24 Underwriting agreement in made to–    
Collect the capital easily.
Get company registered.
Enter into contracts with others.
Get accounts audited.

25 Underwriting commission may be paid in the issue price of shares @–    
10%
5%
2.5 %
3%

26 Maximum limit of brokerage on all type of public issues is–    
0.5%
2%
1.5%
3%

27 When the investment banker bears the risk of not being able to sell a new security at the established price, this is known as:
a best efforts offering
underwriting
shelf registration
making a market

28 Amalgamation takes place with the objective of–
To eliminate the competition between themselves
To reduce the expenses
To capture the market
None of these

29 Excess of purchase consideration over net assets is called-    
Revenue loss
Capital reserve
Capital profit
Goodwill
Question No.  29    Marks - 10
As per AS-14, purchase consideration is payable to–    
Options    
Debenture-holders    
Shareholders    
Creditors    
Shareholders, Debenture-holders and Creditors.    

30 The situation of formation of one company and liquidation of more than one company is known as ____________.        
Reconstruction
Absorption
Merger
Amalgamation

31 Which one of the following does not relate to Profit and Loss Appropriation A/c?    
Contribution to General Reserve
Proposed Dividend
Provision for Depreciation
Interim Dividend

32 Which of the following does not include the divisible profits?    
Revenue reserve
General reserve
Capital reserve
Subsidies and credit balance of P./L. A/c

33 Employee provident fund is a:    
Liability
Provision
Loan
None for the above

34 Dividend is calculated on:    
Called up capital
Paid up capital
Paid up capital & calls in advance
Subscribed capital

35 Which section of the Companies Act contains the provisions regarding overall managerial remuneration?        
Section 349
Section 198
Section 387
Section 79

36 Which section of the Companies Act contains the provision regarding part-time director?    
Section 198
Section 387
Section 309(3)
Section 309(4)

37 Which one of the following items is not included in the managerial remuneration?    
Dearness allowance
Salary
Commission
Encashment of leaves

38 In case there is only one whole-time director in a company, maximum remuneration payable to director will be …………………of the net profit calculated u/S 349.
5%
7%
10%
12%

39 If a company acquires the controlling interest in another company, it is called……………….company.    
Holding
Partly owned
Subsidiary
None of the above

40 On the acquiring of shares in the subsidiary company, the holding company credits the banks account and debits……………….account.        
Profit and Loss
Investment
Cash
Stock