If all the debentures are redeemed, the balance in the debenture redemption fund account is transferred to:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → General reserve
Once all the debentures are redeemed, the amount set aside for them is no longer needed; it is a free reserve and is transferred to the General Reserve. The latest book uses the term Debenture Redemption Reserve for this amount and records the same transfer to General Reserve.
Note: This question is from the pre-rationalised NCERT book. The question (with the term “debentures redemption fund”) is not there in the latest NCERT book (2026-27), but the topic is still in the CUET 2026 syllabus, so do not skip it.
NCERT (Pre-rationalised edition):
NCERT (Pre-rationalised edition):
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