When own debentures are cancelled, any profit on cancellation is transferred to: - Accountancy MCQ CUET Accountancy 2022 8 Aug Shift 2 2026 | ExamTest.live | ExamTest.live

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1 mark

When own debentures are cancelled, any profit on cancellation is transferred to:

A $Profit and Loss Account$
B $General Reserve$
C $Debenture Redemption Reserve$
D $Capital Reserve$

Solution & Step-by-step Explanation

Profit on cancellation of own debentures is a capital profit, and hence it is transferred to the Capital Reserve account.

Practice this question

Try it yourself before checking the explanation above.

When own debentures are cancelled, any profit on cancellation is transferred to:

A

Profit and Loss Account

B

General Reserve

C

Debenture Redemption Reserve

D

Capital Reserve

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Company Accounts Debentures

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