S.Y B.COM
SEMESTER - 3
HIGHER FINANCIAL ACCOUNTING
(HFA)
MCQS: UNIT III - REDEMPTION OF DEBENTURES
1. Debentures can be redeemed by _________.
A. issue of cheque
B. transfer of fixed assets
C. transfer of investment
D. endorsement of bill of exchange
2. To provide funds for redemption a company may _______.
A. create sinking fund
B. create redemption fund
C. remain inactive
D. open new bank account
3. Uncollected redemption money should be shown as
A. loan
B. contingent liabilities
C. current liabilities
D. capital
4. The forms of redemption of debentures are specified at the time of ________.
A. issue of debentures
B. allotment
C. receipt of application
D. redemption
5. The interest on investment representing sinking fund should be credited to _________.
A. Profit & Loss Account
B. Sinking Fund Account
C. Debentures Account
D. Capital Reserve
6. After redemption of debentures, balance in sinking fund should be transferred to ________.
A. capital reserve
B. general reserve
C. security premium
D. profit & loss account
7. The Companies Act requires creation of by a company issuing debentures,
A. capital reserve
B. capital redemption reserve
C. debenture redemption reserve
D. statutory reserve
8. RIL issued 500 debentures of Rs.100 each holders of these debentures have an option to convert their holding to equity shares of Rs. 100 each, at a premium of Rs. 25 at any time within 3 years from the date of issue. The number of equity shares to be issued for conversion is _______.
A. 500 shares
B. 400 shares
C. 625 shares
D. 375 shares
9. Kavita Ltd. issued 50,000 8% debentures of Rs.10 each at par, which are redeemable after 5 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is _________.
A. Rs. 40,000
B. Rs. 10,000
C. Rs. 20,000
D. Rs. 5,000
10. Debentures may be
A. Secured
B. Redeemable
C. Unsecured
D. All of the above
11. Interest on sinking fund investment is credited to ________.
A. Sinking Fund Account
B. Profit & Loss Account
C. Profit & Loss Appropriation Account
D. none of the above
12. Loss on sale of sinking fund investment is debited to
A. Profit & Loss Account
B. Sinking Fund Account
C. Sinking Fund Investment Account
D. Revenue Reserve Account
13. A company has to create debenture redemption reserve as per _______.
A. Rule 18 (7) of companies Rules 2014
B. M/A
C. A/A
D. None
14. Redemption out of capital can be made when
A. profit is kept aside
B. provision is made
C. No profit is set aside for redemption
D. Nil
15. Interest on debentures is pay able out of
A. income
B. profit
C. capital
D. none of the above
16. When debentures become due, the claim is credited to _______.
A. Bank Account
B. Debenture holders Account
C. Debentures Account
D. none of the above
17. Premium on redemption of debentures appears in the Balance Sheet till the date of redemption on
A. Asset side
B. Liability side
C. Profit & Loss Account credit side
D. None of the above
18. As per Companies Act 2013, the company is required to create Debenture redemption reserve equal to _______.
A. 100% of the issue size
B. 20% of the issue size
C. 25% of the issue size
D. 10% of the issue size
19. Debentures can be redeemed out of
A. Capital
B. Divisible profits
C. Capital or profit
D. Proceeds of fresh issue
20. In case of redemption of debentures out of profits the amount to be transferred to General Reserve is equal to _________.
A. Claim on redemption
B. Premium on redemption
C. Face value of debentures redeemed
D. None of the above
21. Debenture Redemption Reserve is dealt with by section ________.
A. 71(4)
B. 117
C. 115
D. 110
22. The Companies Act 2013 came into force w.e.f. _______.
A. 12-9-2013
B. 15-12-2000
C. 31-3-2000
D. 1-4-2001
23. Debenture Redemption Reserve must be created when a company redeems debentures
A. out of capital
B. By conversion
C. out of profit
D. None of the above
24. Transfer to Debenture Redemption Reserve must be made _________.
A. Every year
B. At the beginning of the 1st year
C. At the end of the period after which debentures are to be redeemed
D. All of the above
25. Before redemption of debentures begins Debenture Redemption Reserve must be _________.
A. More than the amount of debenture liability
B. Less than the amount of debenture liability
C. Equal to the amount of debenture liability
D. None of the above
26. Sinking Fund A/c for redemption of Debentures is shown under ________.
A. Reserves and Surplus
B. Unsecured Loans
C. Fixed Assets
D. Secured Loans
27. The Annual set aside for redemption of debentures, is equal to ________.
A. Redemption claim x Factor in S.F. Table
B. Redemption claim ÷ Factor in S.F. Table
C. Redemption claim + Factor in S.F. Table
D. None of the above
28. On redemption of Debentures by conversion into equity shares the amount of transfer to General Reserve is ________.
A. Face value of debentures redeemed
B. Face value of equity shares issued
C. Nil
D. difference between face value of debentures redeemed and the amount of equity shares issued
29. A company issuing debentures is required to create Debenture Redemption Reserve if the maturity period is more than ________.
A. 10 months
B. 24 months
C. 15 months
D. 18 months
30. A company may redeem debentures out of capital if the maturity period is less than
A. 18 months
B. 12 months
C. 15 months
D. 24 months
31. Debentures can be redeemed by ________.
A. Lumsum payment
B. Annual installment
C. Purchase in the open market
D. All of the above
32. The claim of debentureholders on redemption is credited to _______.
A. Bank A/c.
B. Sinking Fund A/c
C. Debentureholders A/c
D. None of the above
33. Premium on redemption of debentures is _______.
A. Adjusted from capital profit
B. Adjusted from accumulated profit
C. Not adjusted at all
D. None of the above
34. For redemption of debentures Sinking Fund is credited out of _______.
A. Capital Reserve
B. Share Capital
C. Unsecured Loans
D. Current years profits
35. Premium on redemption of Debentures till the date of redemption appears in the Balance Sheet on
A. Asset side of Balance sheet
B. Liability side of Balance Sheet
C. Credit side of Profit and Loss A/c
D. Debit side of Profit and Loss A/c
36. Profit or Loss on sale of sinking Fund Investment is transferred to
A. Sinking Fund A/c
B. Profit and Loss A/c
C. Securities premium A/c
D. General Reserve A/c
37. Capital Reserve is
A. Current year's profit
B. Past accumulated profits
C. Capital profit
D. Divisible profit
38. Debentures may be redeemed out of
A. Capital
B. Profit
C. Conversion into shares
D. All of the above
39. Companies exempted from creation of D.R.R.
A. Banking Companies
B. Financial Institutions regulated by RBI
C. Listed Companies
D. a and b
40. Debenture Redemption Reserve shall be created out of
A. Divisible profit
B. Revenue profit
C. Capital profit
D. None of the above
41. Debenture Redemption Reserve should be
A. 25% of the value of debentures issued
B. 50% of the value of debentures issued
C. 15% of the value of debentures issued
D. All of the above
42. Investment of D.R.R. should be
A. 15% of NV of debentures maturing
B. 20% of NV of debentures maturing
C. 50% of NV of debentures maturing
D. None of the above
43. Investment of D.R.R. is to be made on
A. 30th day of April each year
B. on or before 30th day of April, each year
C. On 31st March every year
D. On 31st December every year
44. In the case of partly convertible debentures D.R.R. shall be created in respect of
A. Non-convertible portion of debenture issue
B. Convertible portion of debenture issue
C. Redeemable portion of Debenture issue
D. All of the above
45. Profit on redemption of Debentures should be transferred to
A. Capital Reserve A/c
B. Securities Premium A/c
C. Debentures Redemption Reserve A/c
D. General Reserve A/c
No comments:
Post a Comment