Question : When an amount that is at least 10 per cent of the nominal (face) value of the outstanding debentures is transferred to Debentures Redemption Reserve Account; before the redemption of debentures, it is termed as------------
Option 1: Out of capital
Option 2: Out of profit
Option 3: Both 1 and 2
Option 4: None of the above
Correct Answer: Out of profit
Solution : Answer = Out of profit
When an amount that is at least 10 per cent of the nominal (face) value of the outstanding debentures is transferred to the Debentures Redemption Reserve Account before the redemption of debentures, it is termed as Redemption out of Profit. Hence, the correct option is 2.
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 --------
Question : Choose which of the following statements is true?
Question : After redeeming the debentures, in part or total outstanding debentures, amount of DRR relating to debentures redeemed is transferred to-------
Question : In the lump sum method after redemption of debentures Amount of Debentures Redemption Reserve (DRR) is transferred to _________.
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