Question : Choose which of the following statements is true?
Option 1: Debentures Redemption Reserve is set aside by a company out of amount available for payment of dividend.
Option 2: General Reserve can be transferred to Debentures Redemption Reserve.
Option 3: Both 1 and 2
Option 4: None of the Above
Correct Answer: Both 1 and 2
Solution : Answer = Both 1 and 2
Debentures Redemption Reserve is set aside by a company out of the amount available for payment of dividends because if debentures are redeemed out of profit and at the end of the year General Reserve can be transferred to Debentures Redemption Reserve.
Hence, the correct option is 3.