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Question
Profit on cancellation of own debentures is transferred to ______.
Options
Statement of profit and loss
Debenture redemption reserve
Capital reserve
MCQ
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Solution
Profit on cancellation of own debentures is transferred to capital reserve.
Explanation:
Profit on cancellation of the company’s own debentures is treated as a capital profit and is transferred to Capital Reserve, not to the Statement of Profit and Loss or Debenture Redemption Reserve.
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