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A company issuing debentures with a maturity period of not more than 18 months, in that case the creation of Debenture Redemption Reserve will be: - Accounts

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Question

A company issuing debentures with a maturity period of not more than 18 months, in that case the creation of Debenture Redemption Reserve will be:

Options

  • 10% of the amount of debentures outstanding

  • 25% of the amount of debentures outstanding

  • 50% of the amount of debentures outstanding

  • None of the above

MCQ
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Solution

None of the above

Explanation:

As per the applicable rules, no Debenture Redemption Reserve (DRR) is required to be created for debentures with a maturity period of not more than 18 months, as these are considered short-term instruments.

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Chapter 8: Company Accounts - Redemption of Debentures - OBJECTIVE TYPE QUESTIONS [Page 8.47]

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D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 8 Company Accounts - Redemption of Debentures
OBJECTIVE TYPE QUESTIONS | Q (A) 2. | Page 8.47
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