When preference shares are redeemed out of the Profit of the company, a reserve is created in the name of Capital redemption reserve.
Options
A
B
C
D
For any discrepancies in this question, email contact@cadada.in
Company AccountsQ-1 | Redemption of Preference SharesQuestion 5253 of 112
All Questions Correct Answer
✅ Option — Correct Option
All Options:
- A
- B
- C
- D
Detailed Solution & Explanation
True: When preference shares are redeemed out of the Profit of the com- pany, a reserve is
created in the name of Capital redemption reserve.
More Questions from Company Accounts
Reserve Capital
Cumulative preference shares
Minimum subscription
Reserve Capital and Capital Reserve carry the same meaning.
As per Table F, the Minimum rate of interest that can be charged on calls- in-Arrear and that can be allowed on calls-in-advance are 10% p.m. and 12% p.m. respectively.
Re-issue of forfeited shares is allotment of shares but not a sale. [May 2018, 2 Marks]
Ready to Master Company Accounts?
Practice all 112 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.
Start Practicing — It's Free