The 'Cost of Control' (Goodwill) arises on consolidation when: MCQ with Answer and Explanation

Question
The 'Cost of Control' (Goodwill) arises on consolidation when:
A. Purchase consideration is more than net assets acquired
B. Net assets are more than purchase consideration
C. Parent company pays less
D. Subsidiary makes loss
Answer: Option A
Solution (By JKSSB Mock Tests)
Goodwill on consolidation arises when cost of investment exceeds the fair value of net assets of subsidiary.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
The 'Input Tax Credit' on capital goods under GST is available:
A. 100% in the first year
B. Only on goods up to ₹5,000
C. Not allowed
D. Spread over the useful life
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Correct Answer: Option A

Explanation:
ITC on capital goods can be availed fully in the year of purchase, except for certain blocked credits.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
S1: The Trading Account is prepared to ascertain gross profit. S2: The Trading Account includes indirect expenses. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. S1 only
C. S2 only
D. Both S1 and S2
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Correct Answer: Option B

Explanation:
The Trading Account is prepared to calculate Gross Profit by matching direct expenses with net sales. Indirect expenses (like office rent, salaries) are recorded in the Profit and Loss Account, not the Trading Account. S1 is correct, S2 is incorrect.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
In a not-for-profit organization, 'Life Membership Fees' is usually treated as:
A. Expense
B. Liability
C. Capital receipt
D. Revenue
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Correct Answer: Option C

Explanation:
Life membership fees are generally treated as capital receipt and transferred to a fund, not income.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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