Accounting for Redemption of Debentures

Q.

Overdraft as per cash book means

Q.

Debenture Redemption Reserves account is transferred to which account?

1. Profit or loss A/c

2. Debenture Redemption Investment A/c

3. General Reserve A/c

4. None of these

Q.

What is meant by 'Issue of debentures at discount and redeemable at premium'?

Q. Debenture redemption reserve is transferred to reserve.

1. securities premium
2. debenture
3. general
4. specific

Q. When debentures are issued at a discount & redeemed at a premium, we route discount on issue of debentures a/c through on issue of debentures a/c.

1. profit
2. loss
3. application
4. allotment

Q.

What are reserves and provisions in auditing?

Q.

What are the two specified securities for debenture redemption investment?

Q.

State clearly the conditions under which a company can issue shares at a discount.

Q.

Which account is to be debited while encashing investment made out of Debenture Redemption Reserves?

1. Debenture Redemption Reserve A/c

2. Debenture Redemption Investment A/c

3. Profit or loss A/c

4. Bank A/c

Q.

In case of redemption in instalments, discount is spread _______.

1. None of these

2. Bank a/c

3. Debentureholders a/c

4. Debentures a/c

Q.

While making payment of 14% debentures to debenture holders, what journal entry we pass?

1. Debentureholders A/c Dr.

   To Bank A/c

2. Bank A/c Dr.

   To Debentureholders A/c

3. 14% Debentures A/c Dr.

   To Bank A/c

4. Bank A/c Dr.

   To 14% Debentures A/c

Q.

Explain the different terms for the issue of debentures with reference to their redemption.

Q.

Which account is credited while making the redemption money due in case of payment by lump sum?

1. None of these

2. Bank a/c

3. Debentureholders a/c

4. Debentures a/c

Q.

Which account is to be credited while encashing investment made out of Debenture Redemption Reserves?

1. Debenture Redemption Investment A/c

2. Bank A/c

3. Profit or loss A/c

4. Debenture Redemption Reserve A/c

Q. 10, 000 10% Debentures of Rs 100 each out of 1, 000 10% Debentures are redeemable within the 12 months of the date of Balance Sheet. They will be shown under _______________.

1. Short term borrowing
2. Other current liabilities
3. Trade payables
4. Short term provisions

Q. account is to be credited while investing 15% of the reserve amount.

1. Profit or loss
2. DRR
3. Bank
4. Debentures

Q. The account is to be debited while encashing investment made out of debenture redemption reserves.

1. Profit or loss
2. DRR
3. Bank
4. Debentures

Q. Rs. 1, 000 being the monthly total of discount allowed to customers was credited to discount account in the ledger. If rectification is done before preparation of trial balance then which of the following is correct?

1. Discount A/c Dr. 2, 000
   To Suspense A/c 2, 000
2. Discount A/c Dr. 1, 000
   To Suspense A/c 2, 000
3. Credit the Discount Account with Rs. 2, 000 saying "To Rectification of wrong credit of Rs. 1, 000 for discount allowed.... Rs. 2, 000.
4. Debit the Discount Account with Rs. 2, 000 saying "By Rectification of wrong credit of Rs. 1, 000 for discount allowed.... Rs. 2, 000.

Q. State, whether the following statements are True or False.

A public company can issue shares at only rate of discount.

Q. Give one word / Term / phrase for each of the following statement :

The capital which is not disclosed in the balance sheet.

Q. account is to be debited while setting aside profits as a reserve.

1. Profit or loss
2. DRR
3. Bank
4. Debentures

Q. An allowance given by receiver of the cash to the giver of cash at the time of payment is known as _____________ .

1. Cash Discount
2. Credit Discount
3. Trade Discount
4. Quality Discount

Q. Reserve for doubtful debts appearing in the trial balance should be _______________.

1. Reduced from related asset in the balance sheet
2. Both A and C
3. Credited to P & L A/c
4. Shown in liability side in balance sheet

Q. The Securities Premium Account should be shown under the head _____________.

1. Share Capital
2. Current Assets
3. Current Liabilities
4. Reserves and Surplus