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Question

Which of the following accounts can not be transferred to capital redemption reserve account?


A
Dividend equalisation account
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B
General reserves
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C
Profit and loss appropriation account
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D
Securities premium reserves
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Solution

The correct option is A Dividend equalisation account
Where any shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend be transferred to a reserve fund to be called "the capital redemption reserve fund".
Following accounts are transferred to CRR
(i) General Reserves
(ii) Profit & Loss Appropriation A/c
(iii) Securities Premium Reserves
(iv) Other free Reserves

Accountancy

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