CBSE Questions for Class 12 Commerce Accountancy Issue And Redemption Of Debentures Quiz 3 - MCQExams.com

Debentures can be redeemed _____________.
  • At par
  • At premium
  • At discount
  • Both (a) and (b)
Premium on redemption is a/an  ____________ of a company payable in future.
  • liability
  • asset
  • income
  • expense
Which of the following is not true about Debenture Redemption Reserve(DRR)?
  • DRR created @ 50% of the amount of debentures issued before commencement of redemption
  • Withdrawal from DRR can be made only after 10% of debenture liability has been redeemed
  • DRR is required in case of fully convertible debenture
  • DRR is not required in case of debentures with a maturity period of 18 months or less
When the debentures are redeemed, the requisite amount of Debenture Redemption Reserve is transferred to ___________.
  • statutory reserve
  • general reserve
  • revenue
  • CRR
No DRR (Debenture Redemption Reserve) is required in case of privately placed debentures.
  • True
  • False
Which of the following is a method of redemption of debentures?
  • Draw of lots
  • Conversion
  • Open Market Purchase
  • All of the Above
If debentures are issued at discount and redeemable at premium, then ____________.
  • Debentures A/c is credited.
  • Loss on Issue of Debentures A/c is debited.
  • Premium on Redemption of Debentures A/c is debited.
  • Both (a) and (b).
The entry for debentures issued at discount but redeemable at par is?
  • Bank A/c Dr.
    To Debentures A/c
    To Discount on Issue of Debentures A/c
  • Debentures A/c. Dr.
    To Bank A/c
    To Discount on Issue of Deb. A/c
  • Bank A/c. Dr.
    Discount on Issue of Deb. A/c. Dr.
    To Debentures A/c.
  • None of these
When the owners debentures are cancelled any profit on cancellation is transferred to __________.
  • General reserve
  • Capital reserve
  • P/L Account
  • None of the above
Which of the following statement is true?
a. A debenture holder is an owner of the company.
b. A debenture holder can get his money back only on the liquidation of the company.
c. A debenture issued at a discount can be redeemed at a premium.
d. A debenture holder receives interest only in the event of profit.
  • Only (a)
  • Only (b)
  • Only (c)
  • Only (d)
When debentures are redeemed out of profits, an equal amount is transferred to _______.
  • CRR
  • Capital reserve
  • Revenue reserve
  • Debenture Redemption Reserve
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