Page 107 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II

notes Capital: 1,00,000 equity Current Assets:
Shares of ` 20 each ` 14 paid up 14,00,000 Sundry Debtors
(` 1,20,000 – ` 30,000) 90,000
Secured Loans: Other Current Assets
(` 8,49,000 – ` 1,20,000) 7,29,000
10% Debentures 6,00,000 Bank balance 20,000

20,00,000 20,00,000

Task Discuss the two types of reconstruction of companies.

self assessment

Choose the correct answer from the following options:
15. In the case of internal reconstruction
(a) Only one company is liquidated.
(b) Two or more companies are liquidated.

(c) One or more companies are liquidated.
(d) No company is liquidated.
16. The amounts sacrificed by shareholders, debenture-holders and creditors are credited to:
(a) General reserve account
(b) Capital reserve account

(c) Statutory reserve account
(d) Capital reduction account
17. If there is any balance in the reconstruction account after writing off the accumulated
losses, that is transferred to:
(a) Contingency account
(b) General reserve account
(c) Capital reserve account
(d) Statutory reserve account

18. For the reduction of capital, the permission is required from:
(a) Court
(b) Controller
(c) Central Government
(d) Company Law Board

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