Page 280 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Unit 11: Profit and Loss Prior to Incorporation

Self Assessment Notes

Select the best alternative:
14. Pre-incorporation loss must be transferred to:

(a) Capital reserve
(b) Goodwill
(c) General reserve

(d) Dividends to members
15. On the sale of business, if a partner wants a preference in return of capital he must get:

(a) Cash
(b) Preference shares
(c) Equity shares

(d) Right shares
16. Pre-incorporation profit of a company is transferred to:
(a) General Reserve

(b) Capital Reserve
(c) P. & L. Account
(d) P. & L. Appropriation Account

17. For what purpose the pre-incorporation profits are used:
(a) To distribute dividend

(b) To write off goodwill
(c) To write off discount on issue of shares
(d) To make a reserve

16. Depreciation is allocated between pre- and post-incorporation period on the basis of:
(a) Turnover Ratio

(b) Time Ratio
(c) Both the above
(d) None of these.

!
Caution The statutory report shall be certified as correct by at least two directors of the
company and of these, one must be managing director.

LOVELY PROFESSIONAL UNIVERSITY 273