Tag: book keeping and accountancy

Questions Related to book keeping and accountancy

The Debenture Redemption Reserve account appears on the liability side of the balance sheet under the head ___________.

  1. capital

  2. reserves and surplus

  3. non-current liabilty

  4. current liability


Correct Option: B

Debentures cannot be redeemed out of :

  1. Profits

  2. Provision

  3. Capital

  4. All the above


Correct Option: A
Explanation:

Debentures can be written-off either by debiting it to profit and loss or to Debentures cannot be issued at a premium and redeemable at par.

When the debentures are redeemed, the requisite amount of Debenture Redemption Reserve is transferred to ___________.

  1. statutory reserve

  2. general reserve

  3. revenue

  4. CRR


Correct Option: B

No DRR (Debenture Redemption Reserve) is required in case of privately placed debentures.

  1. True

  2. False


Correct Option: A

A price exclusive of the interest for the period for which the seller held the debentures is called _________________.

  1. Ex-interest price

  2. Cum-interest price

  3. Plus-interest price

  4. Additional-interest price


Correct Option: A

Withdrawal from DRR is permissible only after ____% of the debenture liability has been redeemed.

  1. 30

  2. 40

  3. 10

  4. 25


Correct Option: C

Preference shares may be redeemed out of________________.

  1. Proceeds of Debentures

  2. Proceeds of new issue of shares

  3. Out of divisible profits

  4. Both (b) and (c)


Correct Option: D

Company should created DRR equivalent to _____% of the amount of debenture issue before redemption of debenture can commence.

  1. 75

  2. 40

  3. 50

  4. 25


Correct Option: C