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- 1. Multiple Choice
When two or more existing companies combine together to form a new company, it is termed as
Amalgamation
Absorption
External reconstruction
Internal reconstruction
- 2. Multiple Choice
There are 2 types of amalgamation
True
False
- 3. Multiple Choice
The following are the features of amalgamation in the nature of merger, EXCEPT:
More than 90% of shareholder of the selling company become the shareholder of purchasing company.
Purchase consideration is in the form of shares only
Assets and liabilities taken over by the purchasing company are shown at book values
Selling companies business will not be continued by the purchasing company.
- 4. Multiple Choice
The following are the features of amalgamation in the nature of purchase, EXCEPT:
Less than 90% of the shareholders of selling company become the shareholder of purchasing company.
Selling companies business may or may not be continued by the purchasing company.
Assets & Liabilities taken over by the purchasing company will be shown at the book values only
Purchase consideration may be in the form of cash, shares or debentures
- 5. Multiple Choice
Purchase consideration is the price payable by the purchasing company to the selling companies shareholders.
True
False
- 6. Multiple Choice
There are ______ methods for calculating purchase consideration.
2
4
6
8
- 7. Multiple Choice
Under __________ method, the purchase consideration need not be calculated as it will be stated in the agreement itself.
Lumpsum Method
Net Payment Method
Net Asset Method
Intrinsic Value Method
- 8. Multiple Choice
Under Net payment method, purchase consideration is calculated based on
Adding Cash, Value of Shares and Value of Debentures Issued to shareholders
Exchange ratio of shares
Need not be calculated
Net Assets Value
- 9. Multiple Choice
When an existing company takes over two or more existing company, it is termed as
Amalgamation
Absorption
External Reconstruction
Internal Reconstruction
- 10. Multiple Choice
In case of absorption, no new company is formed.
True
False
- 11. Multiple Choice
Usually external reconstruction is undertaken by such company which is continuously incurring loss.
True
False
- 12. Multiple Choice
In case of _____________, an existing company is liquidated and a new company is formed with the same shareholders
Internal Reconstruction
External reconstruction
Absorption
Amalgamation
- 13. Multiple Choice
In Internal reconstruction, there is reorganisation of the financial structure of the company.
True
False
- 14. Multiple Choice
In case of internal reconstruction, the company is not liquidated.
True
False
- 15. Multiple Choice
Internal and external reconstruction are undertaken by companies under going loss.
True
False
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