Issue of Debenture Flashcards
1
Q
Debentures issued as Collateral Security
a) are recorded in books
b) are not recorded in books
c) may/ may not be recorded in books
A
c)may/ may not be recorded in books
2
Q
Discount on issue of debentures is restricted to
a)10% b)15% c)20% d)None of these
A
d)None of these
3
Q
Zero-Coupon Bonds are issued : (A) At Zero Interest Rate (B) With Specified Rate of Interest (C) Without Specified Rate of Interest (D) None of These
A
C)without a specified rate of interest
4
Q
On liquidation of the company, the principal amount of debentures is returned : (A) First of All (B) Last of All (C) Before Equity Capital (D) After Equity Capital
A
C- Before Equity Capital
5
Q
The principal amount of debentures will be repaid by the company either at the end of a specified period or by instalments during the lifetime of the company. Such types of debentures are called : (A) Redeemable Debentures (B) Irredeemable Debentures (C) Convertible Debentures (D) Bearer Debentures
A
A- Redeemable Debentures
6
Q
The debentures whose principal amount is not repayable by the company during its lifetime, but the payment is made only at the time of Liquidation of the company, such debentures are called : (A) Bearer Debentures (B) Redeemable Debentures (C) Irredeemable Debentures (D) Non-Convertible Debentures
A
C- Irredeemable debentures
7
Q
The premium on Redemption of Debentures Account is : (A) Personal Account (B) Real Account (C) Nominal Account (D) All of the Above
A
A- Personal Account
8
Q
Globe Ltd. issues 20,000, 9% debentures of? 100 each at a discount of 5% redeemable at the end of 5 years at a premium of 6%. For what amount ‘Loss on Issue of Debentures Account’ will be debited? (A) ₹1,00,000 (B) ₹1,20,000 (C) ₹2,80,000 (D) ₹2,20,000
A
Loss on Isue= (Discount + loss)= 2,20,000
9
Q
When does a company create DRR?
A
When debentures are to be redeemed from profit.
10
Q
Balance in DRR after Redemption of all debentures is transferred to ______
A
General Reserve
11
Q
Loss on Issue of Debentures is written off from
a) Capital reserve b)Secret Reserve
c) Reserve Capital
A
a- Capital Reserve
