CBSE Class 12 Accountancy Sure Shot Questions Worksheet Set A

1 MARK QUESTIONS (To be answered in one word or one sentence)

COMPANY ACCOUNTS – REDEMPTION OF DEBENTURES

Question. Out of the following in which situation companies do not require creation of Debenture Redemption Reserve
(a) When debentures are issued with a maturity period of 18 months or less.
(b) When infrastructure companies issue debentures.
(c) When financial companies issue debentures.
(d) conversion of debentures into shares
Answer : C

Question. A Ltd. had ₹10,00,000 9% debentures due for redemption on 1.10.12 at a premium of 5%. The company had a Debenture Redemption Reserve of ₹1,64,000. How much Debenture Redemption Reserve needs to be created?
(a) ₹ 86,000
(b) ₹ 96,000
(c) ₹ 54,000
(d) ₹ 76,000
Answer : A

Question. Debentures can be redeemed out of
(a) Capital
(b) Surplus Funds
(c) Profits
(d) All of the above
Answer : D

Question. Where is Debenture Redemption Reserve transferred once all debentures are redeemed?
(a) Capital Reserve
(b) General Reserve
(c) Securities Premium Reserve
(d) P&L A/c
Answer : B

Question. P Ltd. redeemed its 360 9% Debentures of ₹100 each which were issued at a premium of 5% by Converting them into equity shares of ₹10 each issued at a discount of 10%. How many shares will be issued for conversion?
(a) 4,200
(b) 4,500
(c) 4,800
(d) 5,000
Answer : A