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Direction: Choose the correct answer to the following questions from the given alternatives:
Profit on cancellation of own debentures is transferred to:
  • a)
    Profit and loss appropriation a/c,
  • b)
    Debenture redemption reserve,
  • c)
    Capital reserve.
  • d)
    General reserve
Correct answer is option 'C'. Can you explain this answer?
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Direction: Choose the correct answer to the following questions from t...


  • Profit and loss appropriation a/c: This account is used to distribute profits among shareholders. It is not the correct place to transfer profit on cancellation of own debentures.

  • Debenture redemption reserve: This reserve is created to ensure that funds are available for the redemption of debentures. Profit on cancellation of own debentures is not transferred here.

  • Capital reserve: Profit on cancellation of own debentures is transferred to capital reserve. Capital reserve is a reserve that is created from the profits earned by a company, but cannot be distributed as dividends.

  • General reserve: General reserve is a reserve created out of profits of a company, which is not specifically earmarked for any particular purpose. It is not the correct place to transfer profit on cancellation of own debentures.


Therefore, the correct answer is option C: Capital reserve.
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Direction: Choose the correct answer to the following questions from the given alternatives:Profit on cancellation of own debentures is transferred to:a)Profit and loss appropriation a/c,b)Debenture redemption reserve,c)Capital reserve.d)General reserveCorrect answer is option 'C'. Can you explain this answer?
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Direction: Choose the correct answer to the following questions from the given alternatives:Profit on cancellation of own debentures is transferred to:a)Profit and loss appropriation a/c,b)Debenture redemption reserve,c)Capital reserve.d)General reserveCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Direction: Choose the correct answer to the following questions from the given alternatives:Profit on cancellation of own debentures is transferred to:a)Profit and loss appropriation a/c,b)Debenture redemption reserve,c)Capital reserve.d)General reserveCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Choose the correct answer to the following questions from the given alternatives:Profit on cancellation of own debentures is transferred to:a)Profit and loss appropriation a/c,b)Debenture redemption reserve,c)Capital reserve.d)General reserveCorrect answer is option 'C'. Can you explain this answer?.
Solutions for Direction: Choose the correct answer to the following questions from the given alternatives:Profit on cancellation of own debentures is transferred to:a)Profit and loss appropriation a/c,b)Debenture redemption reserve,c)Capital reserve.d)General reserveCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
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