Question : In the lump sum method after redemption of debentures Amount of Debentures Redemption Reserve (DRR) is transferred to _________.
Option 1: General Reserve
Option 2: Capital Reserve
Option 3: General Reserve
Option 4: None of the above
Answer (1)
19th Jan, 2024
Correct Answer: General Reserve
Solution : Answer = General Reserve
In the lump sum method, after the redemption of debentures, the amount of the Debenture Redemption Reserve (DRR) is typically transferred to the General Reserve. This transfer ensures that funds are set aside for the purpose of debenture redemption and are then retained for general corporate purposes, bolstering financial stability.
Hence, the correct option is 1.
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