Practice Methods of Redemption - 2.4.2 | Chapter 2: Joint Stock Company Accounts | ICSE Class 12 Accounts
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2.4.2 - Methods of Redemption

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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Define what redemption of debentures means.

💡 Hint: Think about what happens when a loan is fully paid back.

Question 2

Easy

Name one method of redeeming debentures.

💡 Hint: Consider how you would pay back someone you owe money.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is the primary purpose of a Debenture Redemption Reserve?

  • To increase the company's profits
  • To save funds for debt repayment
  • To invest in new projects

💡 Hint: Think about why a company might want to ensure it can meet its debt obligations.

Question 2

True or False: A lump sum payment means spreading out payments over time.

  • True
  • False

💡 Hint: Consider the definition of 'lump sum'.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company has issued ₹20,00,000 worth of debentures that mature in two years. If they decide on redeeming them partially every year via installment, what would be the likely advantages and disadvantages of this approach?

💡 Hint: Consider how each option impacts the company's financial health.

Question 2

Analyze the effect on existing shareholders if a company redeems its debentures by converting them into shares. What considerations should be made?

💡 Hint: Think about ownership versus debt.

Challenge and get performance evaluation