Practice Test

Q1) Interest received on debentures redemption fund investment will be : Show Answer

Q2) The balance of Debenture Sinking Fund is transferred to Show Answer

Q3) Loss of sale of Sinking Fund Investments will be debited to Show Answer

Q4) A company issuing debentures is required to create Debenture Redemption Reserve if the maturity period is more than Show Answer

Q5) A company may redeem debentures out of capital if the maturity period is less than Show Answer

Q6) Which of the following statements is true ? Show Answer

Q7) Which of the following statements is false ? Show Answer

Q8) The periodical interest received from investment against debenture redemption fund is credited to _____ Show Answer

Q9) When debentures become due for redemption, the entry is Show Answer

Q10) Till debentures are redeemed, loss on issue of debentures is Show Answer

Q11) The premium payable on the redemption of debentures is Show Answer

Q12) According to SEBI guidelines, the company is required to create a debentures redemption reserve equivalent to Show Answer

Q13) For the redemption of debentures, sinking fund is created out of Show Answer

Q14) Till the date of redemption of debentures' Premium on Redemption of Debentures' appears on the Show Answer

Q15) Following balances are given in trial balance : Debenture redemption fund 50,000 Debenture redemption fund investment 50,000 Interest on debenture redemption fund investment 3,000 Increase in Debenture redemption fund by 10,000 Debenture redemption fund in Balance Sheet will be ___ Show Answer

Q16) Interest on Sinking Fund Investment is credited to ____ Account. Show Answer

Q17) Sinking Fund Account always shows____balance. Show Answer

Q18) Sinking Fund Investment Account always shows ___ balance. Show Answer

Q19) If debentures are to be redeemed at a premium, such premium must be provided as a liability at the time of _____. Show Answer

Q20) Red. of deb. out of capital may happen if the deb. are for a period of ____ 18 months. Show Answer

Q21) A company which issues debentures must create a ____ for redemption of such debentures, out of its profits, every year, until such debentures are redeemed. Show Answer

Q22) Interest on Deb. Red. Sinking Fund Invest. is transferred to _____. Show Answer

Q23) Debenture Red. Reserve is ____ be created if debentures are redeemed through conversion. Show Answer

Q24) Debenture Redemption Reserve is ___ be created in respect of the non-convertible portion of the convertible debentures. Show Answer

Q25) Interest on Sinking Fund Investment is credited to ___ A/c. Show Answer

Q26) Interest on Debenture Redemption Sinking Fund Investments is transferred to Profits and Loss Account. Show Answer

Q27) After debentures are redeemed balance of Debenture Redemption Reserve is transferred to Capital Reserve. Show Answer

Q28) Whenever debenture are redeemed out of profits, an equivalent amount will be transferred to Debenture Redemption Reserve. Show Answer

Q29) A company issuing debenture with maturity period of more than 18 months required to create Debenture Redemption Reserve. Show Answer

Q30) Debenture Redemption Reserve is to be created even if debentures are redeemed through conversion. Show Answer

Q31) The balance of Debenture Sinking Fund Investment A/c is transferred to Debenture sinking Fund A/c. Show Answer

Q32) The balance of Debentures Sinking Fund A/c is transferredto Debentures Sinking Fund Investment A/c. Show Answer

Q33) A debenture holder is an owner of the company Show Answer

Q34) A debenture holder can get his money back only on the liquidation at the company. Show Answer

Q35) A debenture issued at a discount can be redeemed at a premium. Show Answer

Q36) A debenture holder receives interest only in the even of profits. Show Answer

Q37) Debentures can be redeemed by payment in lumpsum at the end of a specified period. Show Answer

Q38) Debentures cannot be redeemed during the life time of the company. Show Answer

Q39) Debentures can be redeemed by payments in annual installments. Show Answer

Q40) Debentures can be purchased in the open market for cancellation. Show Answer

Q41) When all the debentures are redeemed, balance in the debentures redemption fund account is transferred to General Reserve. Show Answer

Q42) The nominal and book values of debenture redemption fund investments account are respectively Rs.50,000 and Rs.48,000. The company sold investments of the nominal value of Rs.30,000 at a price which was just sufficient to redeem debentures of Rs.30,000 at 10% premium. The profit on sale of investments is Rs.3,000. Show Answer

Q43) When part of debentures are redeemed out of profits, an equal amount is transferred to General Reserve. Show Answer

Q44) Profit on sale of debenture redemption fund investments in the first instance is credited to General Reserve. Show Answer