Consolidation of Accounts
There are various ways of carrying on business. Company is a very popular form. There are various classes in which we can classify various companies according to the conditions provided.
A company can be a holding company or subsidiary company as the case may be.
As per section 2(46) “holding company”, in relation to one or more other companies, means a company of which such companies are subsidiary companies; AND
As per Section 2(87) of the Companies Act, 2013 “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company— (i) controls the composition of the Board of Directors; or (ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies: Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.
Explanation.—For the purposes of this clause,— (a) a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the holding company; (b) the composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors; (c) the expression “company” includes any body corporate; (d) “layer” in relation to a holding company means its subsidiary or subsidiaries;
The final accounts of the company need to be consolidated, it is to be fulfilled mandatorily. Here is a quiz on consolidation of accounts of holding and subsidiary company. Test your knowledge!
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- Question 1 of 10
1. Question1 points
VAT is multipoint tax.Correct
VAT is multipoint tax levied on every addition of value in sale transaction.Incorrect
- Question 2 of 10
2. Question1 points
What is the rate of VAT for precious and semiprecious metals?Correct
1% is the rate of VAT for precious and semiprecious metals.Incorrect
- Question 3 of 10
3. Question1 points
VAT is not applicable on following productsCorrect
Products like above are out of ambit of VAT.Incorrect
- Question 4 of 10
4. Question1 points
VAT is applicable on sale transaction which is/areCorrect
VAT is applicable on intra state sale transactions.Incorrect
- Question 5 of 10
5. Question1 points
VAT is levied atCorrect
VAT is levied at every point of sale on the value addition made.Incorrect
- Question 6 of 10
6. Question1 points
VAT is caculated onCorrect
VAT is calculated only on addition made from previous transaction.Incorrect
- Question 7 of 10
7. Question1 points
Rates of VAT areCorrect
There are four uniform VAT rates.Incorrect
- Question 8 of 10
8. Question1 points
Input VAT credit is available on inter-state purchases.Correct
Input credit is not available for inter state purchases.Incorrect
- Question 9 of 10
9. Question1 points
Which of the following tax is paid by the dealer on his local purchases of business inputs?Correct
First Point Tax tax is paid by the dealer on his local purchases of business inputs.Incorrect
- Question 10 of 10
10. Question1 points
VAT eliminates cascading effect.Correct
Since VAT is levied only on vlaue addition made in a transation,, it avoids cascading effect.Incorrect