If all the debentures are redeemed, balance in the Debenture Redemption Fund account is transferred to:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → General Reserve
The Debenture Redemption Fund is built up out of profits set aside each year. Once every debenture is redeemed the purpose of the fund is over, and its balance, being undistributed profit, is transferred to General Reserve.
Note: This question is from the pre-rationalised NCERT book. The topic is not there in the latest NCERT book (2026-27), but it is still in the CUET 2026 syllabus, so do not skip it.
NCERT (Pre-rationalised edition):
NCERT (Pre-rationalised edition):
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