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Important Questions Accounting

The document contains 250 important questions and answers related to valuation and accounting, covering topics such as goodwill, holding company accounts, amalgamation, inflation accounting, and banking and insurance company accounts. Key concepts include methods of goodwill valuation, types of amalgamation, and the purpose of final accounts. Each section provides definitions and keywords relevant to the subject matter.

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ragusriram411
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25 views2 pages

Important Questions Accounting

The document contains 250 important questions and answers related to valuation and accounting, covering topics such as goodwill, holding company accounts, amalgamation, inflation accounting, and banking and insurance company accounts. Key concepts include methods of goodwill valuation, types of amalgamation, and the purpose of final accounts. Each section provides definitions and keywords relevant to the subject matter.

Uploaded by

ragusriram411
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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250 Important Questions & Answers - Valuation & Accounting

Unit I: Valuation of Goodwill and Shares


Q1: What is goodwill?
A: Goodwill is an intangible asset representing the excess earning capacity of a business.
Keywords: Keywords: Intangible asset, Excess earnings, Reputation
Q2: Name the three methods of goodwill valuation.
A: Average Profits Method, Super Profits Method, Capitalization Method.
Keywords: Keywords: Average Profits, Super Profits, Capitalization

Unit II: Holding Company Accounts


Q1: What is a holding company?
A: A holding company is a company that controls another company by owning a majority of its
shares.
Keywords: Keywords: Control, Shares, Subsidiary
Q2: What is mutual owing in holding company accounts?
A: It refers to inter-company transactions where a subsidiary and holding company owe money to
each other.
Keywords: Keywords: Inter-company transactions, Debt, Accounts

Unit III: Amalgamation and Absorption


Q1: What is amalgamation?
A: Amalgamation is the merging of two or more companies into a single entity.
Keywords: Keywords: Merging, New entity, Business combination
Q2: What are the two types of amalgamation?
A: Amalgamation in the nature of merger and amalgamation in the nature of purchase.
Keywords: Keywords: Merger, Purchase, Accounting Standard

Unit IV: Inflation Accounting


Q1: What is inflation accounting?
A: It is the method of adjusting financial statements to reflect the impact of inflation.
Keywords: Keywords: Inflation, Adjustment, Financial statements
Q2: Name two methods of inflation accounting.
A: Current Purchasing Power (CPP) and Current Cost Accounting (CCA).
Keywords: Keywords: CPP, CCA, Price changes

Unit V: Banking and Insurance Company Accounts


Q1: What is rebate on bills discounted?
A: It is the unearned interest on discounted bills that extends into the next financial period.
Keywords: Keywords: Unearned interest, Bills, Financial period
Q2: What are the two main types of insurance accounts?
A: Life Insurance and General Insurance accounts.
Keywords: Keywords: Life Insurance, General Insurance, Premiums
Unit VI: Experiential Learning
Q1: What are final accounts in banking?
A: Final accounts in banking include the Profit & Loss Account and the Balance Sheet.
Keywords: Keywords: P&L, Balance Sheet, Bank accounting
Q2: What is the purpose of preparing final accounts for insurance companies?
A: To report financial performance and ensure regulatory compliance.
Keywords: Keywords: Financial reporting, Regulation, Insurance

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