Question : Choose the correct statement
Option 1: DRR should be transferred to General Reserve after each redemption proportionately.
Option 2: DRR can be transferred to General Reserve after all the debentures have been redeemed.
Option 3: Both 1 and 2
Option 4: None of the above
Correct Answer: Both 1 and 2
Solution : Answer = Both 1 and 2
The Companies Act, 2013 and Rules thereunder prescribe that DRR shall be at least 10 per cent of Outstanding Debentures. Thus, DRR should be transferred to the General Reserve after each redemption proportionately. Alternatively, DRR can be transferred to the General Reserve after all the debentures have been redeemed.
In the absence of any instruction in the question, DRR should be transferred to the General Reserve in proportion to the debentures redeemed. Hence, the correct option is 3.
Question : In the lump sum method after redemption of debentures Amount of Debentures Redemption Reserve (DRR) is transferred to _________.
Question : After redeeming the debentures, in part or total outstanding debentures, amount of DRR relating to debentures redeemed is transferred to-------
Question : Debentures are redeemed without setting aside an amount to Debentures Redemption Reserve (DRR). It is called redemption ________.
Question : When Debentures are redeemed setting aside amount equivalent to nominal (face) value of outstanding debentures to Debentures Redemption Reserve (DRR). It is known as redemption -------
Question : When Debentures are redeemed setting aside 10% of nominal (face) value of outstanding debentures to Debentures Redemption Reserve (DRR) known as redemption out of --------
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