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    CR - MCQ

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    sameer
    1. The document outlines various steps and accounting entries related to capital reduction and internal reconstruction of companies. It discusses transferring amounts to capital reserve or capital reduction accounts, subdividing shares, settling creditor claims through equity shares or cash, and converting debentures. 2. Key steps include crediting capital reduction accounts for amounts forfeited by preference shareholders or creditors, allotting shares to creditors in satisfaction of claims, and recording subdivision of shares or consolidation through journal entries. 3. Internal reconstruction does not require purchase consideration or liquidation of the company, and reconstruction expenses are debited to the capital reduction account.

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    CR - MCQ

    Uploaded by

    sameer
    179 views2 pages
    1. The document outlines various steps and accounting entries related to capital reduction and internal reconstruction of companies. It discusses transferring amounts to capital reserve or capital reduction accounts, subdividing shares, settling creditor claims through equity shares or cash, and converting debentures. 2. Key steps include crediting capital reduction accounts for amounts forfeited by preference shareholders or creditors, allotting shares to creditors in satisfaction of claims, and recording subdivision of shares or consolidation through journal entries. 3. Internal reconstruction does not require purchase consideration or liquidation of the company, and reconstruction expenses are debited to the capital reduction account.

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    CR . MCQ

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    1. The document outlines various steps and accounting entries related to capital reduction and internal reconstruction of companies. It discusses transferring amounts to capital reserve or capital reduction accounts, subdividing shares, settling creditor claims through equity shares or cash, and converting debentures. 2. Key steps include crediting capital reduction accounts for amounts forfeited by preference shareholders or creditors, allotting shares to creditors in satisfaction of claims, and recording subdivision of shares or consolidation through journal entries. 3. Internal reconstruction does not require purchase consideration or liquidation of the company, and reconstruction expenses are debited to the capital reduction account.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    179 views2 pages

    CR - MCQ

    Uploaded by

    sameer
    1. The document outlines various steps and accounting entries related to capital reduction and internal reconstruction of companies. It discusses transferring amounts to capital reserve or capital reduction accounts, subdividing shares, settling creditor claims through equity shares or cash, and converting debentures. 2. Key steps include crediting capital reduction accounts for amounts forfeited by preference shareholders or creditors, allotting shares to creditors in satisfaction of claims, and recording subdivision of shares or consolidation through journal entries. 3. Internal reconstruction does not require purchase consideration or liquidation of the company, and reconstruction expenses are debited to the capital reduction account.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 2

    1. Capital reduction is implemented as per the section _____ of companies act.

    Section 66

    2. Balance in capital reduction should be transferred to ___ . Capital reserve

    3. And reduced words are to be shown as in Balance sheet as per ____ requirement. Company law

    4. XYZ limited had on 31st December 2008 ; 80,000 equity shares at Rs.10 each. It was decided to reduce
    shares to Rs.8 each . The reduction is 1,60,000

    5. Creditors of the company are Rs.50,00,000 one creditors for 20,00,000 decided to forego 40% of his
    claim . He is allotted 30,000 equity shares of Rs.40 each in full satisfaction. The amount transferred to
    capital reduction is ___ Rs.8,00,000

    6. The preference shareholders agree to forego arrears of preference dividend of Rs.72,000. The amount
    transferred to capital reduction account is ____. Nil

    7. Creditors are Rs.300,000. They are given the option either accept 50% of their claim in case in full
    settlement or to convert their claim in to equity shares of Rs.10 each. Creditors of Rs.2,00,000 opt for
    shares in satisfaction of the claim . Capital reduction account is credited by _____. Rs.50,000

    8. Investment costing of Rs.24000 given to Bank for bank overdraft of Rs.16,800. The capital reduction is
    debited by ______. Rs.7,200

    9. Y Ltd. Has 8000 equity shares of Rs.100 each fully paid. Each share is subdivided into 10 equity shares
    of Rs.10 each. The number of shares after sub division will be ____. Rs.80,000

    10. Provision for taxation is 100,000. The tax liability of the company is settled at Rs.80,000 And it is paid
    immediately. Amount credited to capital reduction is Rs.20,000

    11. 6% debentures of Rs.100 each Rs.1,00,000 to be converted into such number of 8% debentures of
    Rs.50 each as to generate the same amount of interest as before. The amount of 8% debentures will be
    ____. Rs.75,000

    12. In internal reconstruction, method of calculation of purchase consideration is by ____. No purchase


    consideration required

    13. On internal reconstruction, assets are written of except ___. Land and building

    14. Payment of reconstruction expenses is debited to ____. Capital reduction account

    15. Share capital. A/c Dr. (Rs.100)


    To share capital A/c (Rs.10) the above entry in the scheme of reconstruction record_____.
    Subdivision of share capital

    16. Share capital. A/c Dr. (Rs.10)


    To share capital A/c (Rs.100) the above entry in the scheme of reconstruction record_____.
    Consolidation of share capital
    17. In internal reconstruction _____. No company is liquidated

    18. The existing 1000 shares of Rs.100 each altered to 10,000 shares of Rs.10 each is __. Subdivision

    19. A Ltd. May alter it’s share capital to b and c

    20. The cancellation of contingent liabilities is no profit no loss for company.

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