Redemption Of Debentures CBSE Questions & Answers

Redemption Of Debentures

This is Accountancy Class 12 Redemption of Debentures CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
When a company not used its reserve or accumulated profit for redemption of its debentures. It is called redemption
  • A
    Out of profit
  • B
    Out of capital
    Correct
  • C
    Against profit
  • D
    Out of reserve
2
Which is the Sources of Redemption of debentures? (a) Proceeds from fresh issue of share capital or debenture holders. (b) From accumulated profits. (c) Proceeds from sale of fixed assets. (d) A company may sale its own debentures. Choose the following Options
  • A
    a, b, c
    Correct
  • B
    b, c, d
  • C
    a, b, c, d
  • D
    b, d, a
3
Redemption out of profit means that adequate amount of profits are transferred to DRR A/c from
  • A
    General reserve
  • B
    Statement of Profit and Loss
    Correct
  • C
    P&L Adjustment A/c
  • D
    P&L A/c
4
If it is mentioned that redemption is out of profit then DRR should be created with the ____ of the nominal value of debentures
  • A
    10 percent
  • B
    50 percent
  • C
    100 percent
    Correct
  • D
    30 percent
5
If it is mentioned in question that redemption is out of capital then DRR should also create with ____ of the nominal value of debentures
  • A
    100 percent
  • B
    50 percent
    Correct
  • C
    30 percent
  • D
    10 percent
6
Calculation of Number of new securities to be issued
  • A
    \(\frac{{{\text{Amount due to debenture holders}}}}{{{\text{Issue Price}}}}\)
    Correct
  • B
    \(\frac{{{\text{Number of debenture holders}}}}{{{\text{Issue Price}}}}\)
  • C
    \(\frac{{{\text{Number of debenture holders}}}}{{{\text{Discount Price}}}}\)
  • D
    \(\frac{{{\text{Number of debenture holders}}}}{{{\text{Premium Price}}}}\)
7
How to Calculate Issue Price
  • A
    Nominal Price + Price Issue of New Securities
  • B
    Nominal Price + Discount on Issue of New Securities
  • C
    Discounted Price + Securities Premium on Issue of New Securities
  • D
    Nominal Price + Securities Premium on Issue of New Securities
    Correct
8
By the maturity date the discount on issue of debenture account is fully written off from the
  • A
    Securities Premium or Statement of P/L
    Correct
  • B
    P&L Adjustment A/c
  • C
    P&L Appropriation A/c
  • D
    General reserve
9
When amount due to Debenture holders discharged by issue of shares. Then share capital account should be
  • A
    Credited
    Correct
  • B
    Debited
  • C
    None
  • D
    Not to entered
10
When the amount due on redemption which account should be debited
  • A
    Bank A/c
  • B
    DRR A/c
  • C
    Debenture holders’ A/c
  • D
    Debentures A/c
    Correct
11
A company may issue new shares which can be utilized for redeeming the debentures. Which method is mentioned here
  • A
    Sale of assets
  • B
    Raise Fresh Capital
    Correct
  • C
    Utilize the profits
  • D
    Surplus fund
12
A part of profit of the company may be retained from distribution to the shareholders and is utilized for the purpose of redemption of debentures. Which method of redemption of debentures is mentioned here
  • A
    Utilise the profits
    Correct
  • B
    Surplus fund
  • C
    Raise Fresh Capital
  • D
    Sale of assets
13
When debentures are issued, premium payable on redemption is ______ to Premium on Redemption of Debentures Account. At the time of redemption the account is _____
  • A
    Credited , Debited
    Correct
  • B
    Credited, Credited
  • C
    Debited, Credited
  • D
    Debited, Debited
14
While closing the DRR account balance amount should transferred to
  • A
    Profit and Loss A/c
  • B
    debenture
  • C
    General Reserve
    Correct
  • D
    debenture holder account
15
When new share are issue at a discount share capital account should be
  • A
    Both
  • B
    Debited
  • C
    No to be entered
  • D
    Credited
    Correct