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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┬а and the amount credited to such account shall not be utilised by the company except for the redemption of debentures.

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