When debentures are redeemed out of profits, an equivalent amount is transferred to :
  • General Reserve
  • Debenture Redemption Reserve
  • Capital Reserve
  • Profit & Loss A/c
When all debentures are redeemed, balance in the Debenture Redemption Fund Account is transferred to:
  • Capital Reserve
  • General Reserve
  • Profit & Loss Appropriation A/c
  • None of these
According to SEBI guidelines, a Company will have to create debenture redemption reserve equivalent to the amount of the following percentage of debenture issued:
  • 50%
  • 25%
  • 70%
  • 100%
The balance of ‘Sinking Fund Account’ after the redemption of debentures is transferred to :
  • Profit & Loss Account
  • Profit & Loss Appropriation Account
  • General Reserve Account
  • Sinking Fund Account
Profit on cancellation of own debentures is transferred to:
  • Profit & Loss Account
  • Profit & Loss Appropriation Account
  • General Reserve Account
  • Capital Reserve Account
If debenture of ₹ 1,00,000 were issued for discount of ₹ 10,000, which are redeemable after four years. Then amount of discount to be written off from P. & L. Account each year is :
  • ₹ 3,000
  • ₹ 4,000
  • ₹ 2,500
  • ₹ 5,000
Debentures can be redeemed out of:
  • Profit
  • Capital
  • Provision
  • All of the above
Premium on redemption of debentures is a :
  • Personal A/c
  • Real A/c
  • Nominal A/c
  • Suspense A/c
Premium on redemption of debentures is generally provided at the time of ……………
  • Issue of debentures
  • Redemption of debentures
  • Writing off
  • After 10 years
Debentures cannot be redeemed at:
  • Par
  • Premium
  • Discount
  • More than 10% premium
If debentures purchased in open market are not immediately cancelled, they are treated as :
  • Current Assets
  • Current Liabilities
  • Investment
  • Capital
Sources of finance of the redemption of debentures are:
  • Redemption out of profits
  • Redemption out of capital
  • The proceeds from fresh issue of shares/debentures
  • All the above
A company issued 1,000, 12% debentures of ₹ 100 each at 10% premium. 12% stand for:
  • Rate of dividend
  • Rate of Tax
  • Rate of interest
  • None of these
A company should transfer to Debenture Redemption Reserve A/c at least what percent of the amount of debentures issued before the commencement of redemption of debentures-
  • 50%
  • 25%
  • 15%
  • 100%
If redemption of debentures is made by conversion method, the amount to be transferred to ‘Debenture Redemption Reserve Account’ will be equal to…….percent of converted amounted.
  • 40
  • 50
  • 60
  • Not required
Loss on Issue of Debenture Account is shown:
  • On Assets side of Balance Sheet
  • On Liabilities side of Balance Sheet
  • On Credit side of P & L Account
  • None of these
Profit on sale of Sinking Fund Investment is transferred to:
  • Profit & Loss Account
  • General Reserve
  • Sinking Fund Account
  • Capital Reserve
Premium on Redemption of Debentures A/c is:
  • Asset
  • Expenses
  • Liability
  • Revenue
Interest on sinking fund investment is credited to :
  • Profit & Loss A/c
  • Sinking Fund A/c
  • General Reserve A/c
  • Sinking Fund Investment A/c
Sinking fund investment is:
  • An Income
  • An exause
  • An Asset
  • A Liability
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