Whenever debentures are cancelled, any profit on cancellation is transferred to _________________.

Profit and Loss Account

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Sinking Fund Account

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Capital Redemption Reserve Account

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Capital Reserve Account

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Solution

The correct option is C Capital Reserve Account
Whenever debentures are transferred, and profit is earned it is capital profit. Hence, any capital profit should be transferred to Capital reserve, and if sinking fund exists, it should be transferred to sinking fund account.

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Whenever debentures are cancelled, any profit on cancellation is transferred to _________________.

The correct option is C Capital Reserve AccountWhenever debentures are transferred, and profit is earned it is capital profit. Hence, any capital profit should be transferred to Capital reserve, and if sinking fund exists, it should be transferred to sinking fund account.

The correct option is C Capital Reserve Account
Whenever debentures are transferred, and profit is earned it is capital profit. Hence, any capital profit should be transferred to Capital reserve, and if sinking fund exists, it should be transferred to sinking fund account.