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    Question

    Where debentures are issued by a company, the company

    shall create a debenture redemption reserve account_______________
    A Out of the profits of the company available for payment of dividend Correct Answer Incorrect Answer
    B Amount credited may be utilized by the company for such use as the Board of Directors may decide Correct Answer Incorrect Answer
    C Amount credited shall not be utilized by the company except for the redemption of debentures Correct Answer Incorrect Answer
    D Both a & b Correct Answer Incorrect Answer
    E Both a & c Correct Answer Incorrect Answer

    Solution

    Companies Act, Section 71. Debentures- (4) Where debentures are issued by a company under this section, the company shall create a debenture redemption reserve account out of the profits of the company available for payment of dividend  and the amount credited to such account shall not be utilised by the company except for the redemption of debentures.

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