A 'Debenture Redemption Reserve' is required to be created as per: MCQ with Answer and Explanation

A 'Debenture Redemption Reserve' is required to be created as per:
A. GST Act
B. Companies Act, 2013
C. Income Tax Act
D. SEBI regulations
Answer: Option B
Solution (By JKSSB Mock Tests)
Companies Act 2013 requires creation of Debenture Redemption Reserve for debentures issued.

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Practice More Accountancy and Book Keeping Questions

Question #1
Verification of assets primarily ensures:
A. Arithmetical accuracy
B. Existence, ownership, and correct valuation
C. Timely payment to creditors
D. Detection of minor cash thefts

Correct Answer: Option B


Explanation:
Verification goes beyond vouching; it involves physically confirming the existence, legal ownership, possession, and proper valuation of assets.

Question #2
Goods distributed as free samples are debited to:
A. Drawings Account
B. Purchases Account
C. Sales Account
D. Advertisement Account

Correct Answer: Option D


Explanation:
Free samples are treated as advertising expense.

Question #3
A firm's average profit is ₹1,20,000, normal rate 10%, capital employed ₹8,00,000. Goodwill by capitalisation of average profit method will be: (Capitalised value of average profit less net assets)
A. ₹12,00,000
B. ₹4,00,000
C. ₹2,00,000
D. ₹8,00,000

Correct Answer: Option B


Explanation:
Capitalised value = 1,20,000 / 10% = 12,00,000. Goodwill = 12,00,000 - 8,00,000 = 4,00,000.