Question

I m not getting net profit but my gross profit is correct.... Qstn no. 2 practical qstns volume 2 chapter 2

Answer 1

DRR is created out of profits of the company & is debited to the statement of P&L(which means profit is reduced). now at the time of redemption of debentures, DRR is transferred to general reserve to give effect to the earlier reduction in profit.