After buy-back of shares from free reserves, which account is created by the CRR transfer?
ACapital Redemption Reserve
BCapital Reserve
CGeneral Reserve
DStatutory Reserve
Answer & Solution
Correct answer: A. Capital Redemption Reserve
1. Step 1: Per Sec 69(1) and Ch 12 illustration: "Revenue reserve A/c Dr 600 To Capital Redemption Reserve A/c 600".
2. Step 2: A new CRR equal to nominal value of bought-back shares is created.
3. Step 3: Hence (B).
_Source: ICAI BoS CA Inter Paper 1, Ch 12 "Buy-Back of Securities"_