Multiple choice

(a) An equity share is a share which is not a preference share. (b) A preference share is one which gets regular dividend irrespective of profit position and preference in case of liquidation. (c) Debenture is a document by which a company acknowledges its indebtedness. (d) Trust receipt is a document that is an undertaking by the borrower when the goods are released by the bank to the borrower without payment being made by the borrower.

  1. (a) to (d) are correct.

  2. (a), (b) and (c) are correct.

  3. (a), (c) and (d) are correct.

  4. (b), (c) and (d) are correct.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Preference share is a share which entitles the holder to a fixed dividend, whose payment takes priority over that of ordinary share dividends. Thus, the given definition is not true.

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