Accounting · Capital Redemption Reserve
Consider the following statements regarding Capital Redemption Reserve (CRR): Statement I: The main purpose of creating CRR is to keep the capital structure of the company variable. Statement II: Another purpose of creating CRR is to protect the interests of creditors, as CRR cannot be utilized for the payment of dividends. Select the correct option:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both Statement I and Statement II are true
- 2Statement I is false but Statement II is true✓
- 3Both Statement I and Statement II are false
- 4Statement I is true but Statement II is false
Correct answer
Statement I is false but Statement II is true
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