Question : When Debentures are redeemed setting aside amount equivalent to nominal (face) value of outstanding debentures to Debentures Redemption Reserve (DRR). It is known as redemption -------

Option 1: Out of capital

Option 2: Out of profit

Option 3: Both 1 and 2

Option 4: None of the above

Question : Debentures are redeemed without setting aside an amount to Debentures Redemption Reserve (DRR). It is called redemption ________.

Option 1: Out of capital

Option 2: Out of profit

Option 3: Both 1 and 2

Option 4: None of the above

Question : Choose which of the following statements is true?

Option 1: If a company sets aside profit to Debentures Redemption Reserve, it means redemption is not out of capital alone.

Option 2: If a company sets aside profit equivalent to nominal (face) value of outstanding debentures to Debentures Redemption Reserve, it means redemption is out of profits.

Option 3: Both 1 and 2

Option 4: None of the above

Question : When an amount that is at least 10 per cent of the nominal (face) value of the outstanding debentures is transferred to Debentures Redemption Reserve Account; before the redemption of debentures, it is termed as------------

Option 1: Out of capital

Option 2: Out of profit

Option 3: Both 1 and 2

Option 4: None of the above

Question : After redeeming the debentures, in part or total outstanding debentures, amount of DRR relating to debentures redeemed is transferred to-------

Option 1: Capital Reserve

Option 2: General Reserve 

Option 3: Capital Redemption Reserve

Option 4: Securities Premium Reserve