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If all the debentures are redeemed, balance in the Debenture Redemption Fund account is transferred to:
Question

If all the debentures are redeemed, balance in the Debenture Redemption Fund account is transferred to:

A.

Capital Reserve

B.

Statement of Profit and Loss

C.

Capital Redemption Reserve

D.

General Reserve

Correct option is D

Upon the redemption of all debentures, the balance in the Debenture Redemption Fund account is transferred to the General Reserve. This reserve is a part of the owners’ equity and is used for general business purposes.

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