Tag: book keeping and accountancy

Questions Related to book keeping and accountancy

Redeemable debentures are those which are payable on the expiry of the ______ period either in lump sum or in installments during the life time of the company. 

book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

  1. Specific

  2. Actual

  3. Indefinite

  4. Average

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Correct Option: A
Explanation:

There are two type of debenture which are classified from the point of view of tenure i.e. 1. Redeemable debentures and 2. Irredeemable debentures.

Redeemable dentures are those which are payable on the expiry of the specific period either in lump sum or in installments during the life time of the company. Debentures can be redeemed either at par or at premium .

Debentureholders having a floating charge have priority in payment over _________________.

book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

  1. Sundry Creditors

  2. Secured Creditors

  3. Unsecured Creditors

  4. Preferential Creditors

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Correct Option: C
Explanation:

 A debenture is a document that lays down the terms and conditions of a loan, and provides clarity and security to lenders if the borrowing company becomes insolvent. Attaching a floating charge to the debenture offers further benefits, enabling the holder to rank above unsecured creditors when it comes to repayment.

The term debenture includes _________.

book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

  1. debenture stock

  2. bonds

  3. any other securities of a company whether constituting a charge on the assets of the company or not

  4. all of the above

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Correct Option: D

Debentures entails payment of fixed rate of interest until ____________.

book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

  1. the company is not declared insolvent

  2. the principal sum is repaid

  3. the company desires not to pay

  4. the debenture holders resolves not to claim so

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Correct Option: B

_____are those debentures where the debenture holder have no option to convert into equity.

book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

  1. Optional debentures

  2. Flexible debentures

  3. Convertible debentures

  4. Non-convertible

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Correct Option: D

Issue of debentures as collateral securities means issue of such debentures as _________.

book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

  1. Subsidiary security

  2. Principal security

  3. In lieu of principal security

  4. None of the above

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Correct Option: A
Explanation:

Issue of Debentures as Collateral. Debentures issued as collateral security is secondary or parallel security for the original loan taken by the company. The lender can realize the collateral security in case borrower fails to make the payment of the original loan.

A Collateral Security is a Subsidiary Security.

Which of the following statement is not true?

book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

  1. Interest on debenture holders is to be paid whether there is profit or loss to the company

  2. There is restriction on utilization of premium on issue of shares

  3. Company can buy back its debentures

  4. Interest on debenture is not shown in Profit and Loss A/c

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Correct Option: D

______ are secured by either a fixed charge or a floating charge.

book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

  1. Naked debentures

  2. Unsecured debentures

  3. Mortgaged debentures

  4. Registered debentures

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Correct Option: C

Debentures which are not secured by any charge upon any assets of the company are called __________.

book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

  1. secured debenture

  2. naked debenture

  3. bearer debenture

  4. floating debenture

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Correct Option: B

_______debentures are those which can be transferred by mere delivery.

book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

  1. Naked

  2. Registered

  3. Bearer

  4. Floating

Show answer
Correct Option: C