• 1. 
    Sources of finance of the redemption of debentures are:

  • Redemption out of profits
  • Redemption out of capital
  • The proceeds from fresh issue of shares/debentures
  • All the above
  • 2. 
    A company issued 1,000, 12% debentures of ₹ 100 each at 10% premium. 12% stand for:

  • Rate of dividend
  • Rate of Tax
  • Rate of interest
  • None of these
  • 3. 
    A company should transfer to Debenture Redemption Reserve A/c at least what percent of the amount of debentures issued before the commencement of redemption of debentures-

  • 50%
  • 25%
  • 15%
  • 100%
  • 4. 
    If redemption of debentures is made by conversion method, the amount to be transferred to ‘Debenture Redemption Reserve Account’ will be equal to…….percent of converted amounted.

  • 40
  • 50
  • 60
  • Not required
  • 5. 
    Loss on Issue of Debenture Account is shown:

  • On Assets side of Balance Sheet
  • On Liabilities side of Balance Sheet
  • On Credit side of P & L Account
  • None of these
  • 6. 
    Profit on sale of Sinking Fund Investment is transferred to:

  • Profit & Loss Account
  • General Reserve
  • Sinking Fund Account
  • Capital Reserve
  • 7. 
    Premium on Redemption of Debentures A/c is:

  • Asset
  • Expenses
  • Liability
  • Revenue
  • 8. 
    Interest on sinking fund investment is credited to :

  • Profit & Loss A/c
  • Sinking Fund A/c
  • General Reserve A/c
  • Sinking Fund Investment A/c
  • 9. 
    Sinking fund investment is:

  • An Income
  • An exause
  • An Asset
  • A Liability
  • 10. 
    When debentures are issued at par and are redeemable at a premium, the loss on such an issue is debited to :

  • Profit & Loss A/c
  • Debenture Application and Allotment A/c
  • Loss on Issue of Debentures A/c
  • Premium on Redemption A/c
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