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mediumMCQCUET Accountancy 2022 8 Aug Shift 22026Accountancy
1 mark

After the debentures are redeemed, the balance in the Sinking Fund Account is transferred to:

  1. A
    capital reserve
  2. B
    general reserve
  3. C
    profit and loss account
  4. D
    secret reserve

Solution & Step-by-step Explanation

After debentures are fully redeemed, the accumulated balance in the Sinking Fund (Debenture Redemption Reserve) represents accumulated profits and is therefore transferred to the General Reserve.

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After the debentures are redeemed, the balance in the Sinking Fund Account is transferred to:
A
capital reserve
B
general reserve
C
profit and loss account
D
secret reserve

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Company AccountsDebentures

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