Issue of Debentures MCQs With Solved Answer

Issue of Debentures MCQs With Solved Answer

Issue of Debentures MCQs With Solved Answer-

Issue of Debentures MCQs With Solved Answer
Issue of Debentures MCQs With Solved Answer

1.A company needs funds for extension and development purpose without increasing its share capital, it can borrow from the general public by issuing certificates for a fixed period of time and at a fixed rate of interest.Such a loan certificate is called-
(a) Equity shares

(b) Bonus’s shares
(c) Debentures

(d) Preference shares

2.Holder of Debenture is called.
(a) Share holder

(b) Debenture holder
(c) Owner of the Company

(d) None of these

3.Features Of Debentures are-

(a) Debenture is redeemed after a fixed period of time.

(b)Debentures may be either secured or unsecured.

(c)Interest payable on a debenture is a charge against profit and hence it is a tax deductible expenditure.

(d)Debenture holders do not enjoy any voting right.

(e) All of these

4.The debentures that are secured by a charge on the assets of the company are called-

(a) Secured or Mortgage Debentures

(b) Unsecured Debentures
(c) Bearer Debentures

(d) Registered Debentures

5.The the debentures which are not recorded in a register of the company are called-

(a) Secured or Mortgage Debentures

(b) Unsecured Debentures
(c) Bearer Debentures

(d) Registered Debentures

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Note: Answers are ginen below at the end.

Issue of Debentures MCQs With Solved Answer
Issue of Debentures MCQs With Solved Answer

6.The debentures that can be converted into shares of the company on the expiry of predecided period, are called

(a) Secured or Mortgage Debentures

(b) Unsecured Debentures
(c) Bearer Debentures

(d) Convertible Debentures

7.The debentures that can not be converted into shares of the company on the expiry of predecided period, are called

(a) Secured or Mortgage Debentures

(b) Unsecured Debentures
(c) Convertible Debentures

(d) Non-Convertible Debentures

8.Debentures which do not carry any security with regard to the principal amount or unpaid interest, are called-

(a) Secured or Mortgage Debentures

(b) Unsecured Debentures
(c) Convertible Debentures

(d) Non-Convertible Debentures

9. The debentures which are not redeemed in the life time of the company. are called-

(a) Non-redeemable Debentures

(b) Redeemable Debentures
(c) Convertible Debentures

(d) Non-Convertible Debentures

10. Debentures can be issued-

(a)  At Par

(b) At Premium
(c) At Discount

(d) All of these

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Note: Answers are ginen below at the end.

Issue of Debentures MCQs With Solved Answer
Issue of Debentures MCQs With Solved Answer

11. When Debentures are issued at a price equal to their face value, it is known as- 

(a) Debentures issued at par

(b) Debentures issued at Premium
(c) Debentures issued at Discount

(d) None of these

12.When  Debentures  are issued at a price more than to their face value, it is known as –

(a) Debentures issued at par

(b) Debentures issued at Premium
(c) Debentures issued at Discount

(d) None of these

13.When  Debentures  are issued at a price less than to their face value, it is known as –

(a) Debentures issued at par

(b) Debentures issued at Premium
(c) Debentures issued at Discount

(d) None of these

14.Debentures can be issued(Ways) – 

(a) Issue of Debentures for cash

(b)Issue of Debentures for consideration other than cash

(c)Debentures issued as collateral security

(d) All of these

15.Debenture is also named as :
(a) Share

(b) Bond
(c) Equity

(d) Reserve

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Note: Answers are ginen below at the end.

Issue of Debentures MCQs With Solved Answer
Issue of Debentures MCQs With Solved Answer

16. When debentures are issued at a discount and are redeemable at a premium, which of the following accounts is debited at the time of issue:
(a) Debentures account,
(b) Premium on redemption of debentures account,
(c) Loss on issue of debentures account
(d) Securities Premium Reserve Account 

17.LARA Co. Ltd purchased assets worth Rs 28, 80,000. It issued debentures of
Rs 100 each at a discount of 4 percent in full satisfaction of the purchase
consideration. The number of debentures issued to vendor is:
(a) 30, 000,

(b) 28,800,
(c) 32,000,

(d) 60,000

18.TARA Co. Ltd purchased assets worth Rs 72, 00,000. It issued debentures of
Rs 100 each at a Premium of 20 percent in full satisfaction of the purchase
consideration. The number of debentures issued to vendor is:
(a) 72, 000,

(b) 70,000,
(c) 80,000,

(d) 60,000

19. A 10 % debenture of a nominal value of Rs. 100 has been issued at Rs.120 debentures are said to be issued at.. 

(a) par

(b) Premium
(c) Discount

(d) None of these

20. A 12% debenture of nominal value of Rs. 100 has been issued at Rs.90 is
said to be issued at .. 

(a) par

(b) Premium
(c) Discount

(d) None of these

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Note: Answers are ginen below at the end.

Issue of Debentures MCQs With Solved Answer
Issue of Debentures MCQs With Solved Answer

21.Whenever a company takes loan from bank or any financial institution it may issue its debentures as secondary security which is in addition to the principal security. Such an issue of debentures is known as…

(a) Issue of Debentures for cash

(b)Issue of Debentures for consideration other than cash

(c)Debentures issued as collateral security

(d) None of these

22.INTEREST ON DEBENTURES  is considered as an expense it is charged against the profit of the company and is payable whether….

(a) profit are earned

(b)profit are earned or not

(c) None of these

23. A company can issue debentures to the vendors as a payment for the purchase of the assets such as issue of debentures is known as …

(a) An issue of debenture consideration other than cash

(b) Issue of Debentures for cash

(c)Debentures issued as collateral security

(d) None of these

24. Debentureholders are

(a) Creditors of the company

(b) Owners of the company

(c) Suppliers of the company

(d) Debtors of the company

25. Debentures issued as collateral security will be debited to…

(a) Cash Account

(b) Bank Account

(c) Debentures Account

(d) Debentures Suspense Account

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Note: Answers are ginen below at the end.

Issue of Debentures MCQs With Solved Answer
Issue of Debentures MCQs With Solved Answer

26. Zero Coupon Bonds are issued..
(a) At Zero Interest Rate
(b) With Specified Rate of Interest
(c) Without Specified Interest Rate
(d) None of These

27. Which of the following statements is false?
(a) At maturity, debenture holders get back their money.
(b) Debentures can be forfeited for non-payment of call money.
(c) In company’s balance sheet, debentures are shown under the head Long term Borrowings.
(d) Interest on debentures is a charge against profits. 

28. On issue of debentures as a collateral security, which account is credited? 
(a) Debentures Account
(b) Bank Loan Account
(c) Debenture Holdings Account
(d) Debenture Suspense Account

29. Premium on redemption of debentures account is a .. 
(a) Nominal Account
(b) Real Account
(c) Personal Account
(d) Assets Account

30. What is the nature of loss on issue of debentures ? 
(a) Revenue nature
(b) Capital nature
(c) Loss of capital nature
(d) Loss of recurring nature

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Note: Answers are ginen below at the end.

Issue of Debentures MCQs With Solved Answer
Issue of Debentures MCQs With Solved Answer

Answer – Question Number 1 To 30 

1.Answer- (c) Debentures

2.Answer- (b) Debenture holder

3.Answer- (e) All of these

4.Answer- (a) Secured or Mortgage Debentures

5.Answer- (c) Bearer Debentures

6.Answer- (d) Convertible Debentures

7.Answer- (d) Non-Convertible Debentures

8.Answer- (b) Unsecured Debentures

9.Answer- (a) Non-redeemable Debentures

10.Answer- (d) All of these

11.Answer- (a) Debentures issued at par

12.Answer- (b) Debentures issued at Premium

13.Answer- (c) Debentures issued at Discount

14.Answer- (d) All of these

15.Answer- (b) Bond

16.Answer- (c) Loss on issue of debentures account

17.Answer- (a) 30, 000

28,80,000/96=30,000

18.Answer- (d) 60,000

72,00,000/120=60,000

19.Answer-(b) Premium

20.Answer- (c) Discount

21.Answer- (c)Debentures issued as collateral security

22.Answer- (b)profit are earned or not

23.Answer- (a) An issue of debenture consideration other than cash

24.Answer- (a) Creditors of the company

25.Answer- (d) Debentures Suspense Account

26.Answer-  (c) Without Specified Interest Rate

27.Answer-(B) Debentures can be forfeited for non-payment of call money.

28.Answer-(a) Debentures Account

29.Answer-c) Personal Account

30.Answer-(c) Loss of capital nature

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