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Issue of Debenture

Board » Bihar Board » Class 12th » English Medium » Commerce » Accountancy » L-10: Issue of Debenture

Objective Questions (MCQs)

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ID- 4743
BSEB, 2018

1. Interest payable on debentures is:

  • (A) An appropriation of profits of the company
  • (B) A charge against profits of the company
  • (C) Transfer to sinking fund
  • (D) None of the above
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ID- 4744
BSEB, 2018

2. The amount received from the issue of debentures is:

  • (A) Capital Receipts
  • (B) Revenue Receipts
  • (C) Capital and Revenue Receipts
  • (D) Neither Capital nor Revenue
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3. On liquidation of a company, the principal amount of debentures is returned:

  • (A) First of all
  • (B) Last of all
  • (C) Before Equity Capital
  • (D) None of these
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4. Debentures cannot be redeemed at:

  • (A) Premium
  • (B) Discount
  • (C) Par
  • (D) More than 10% premium
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ID- 4747
BSEB, 2018

5. Discount on the issue of debentures is:

  • (A) Fixed Assets
  • (B) Current Assets
  • (C) Real Assets
  • (D) Fictitious Assets
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ID- 4748

6. Discount on the issue of debentures is in the nature of?

  • (A) Revenue Loss
  • (B) Capital Loss
  • (C) Deferred Revenue Expenditure
  • (D) None of these
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7. In the Balance Sheet of a Company, debentures are shown under the head:

  • (A) Unsecured Loans
  • (B) Long-term Borrowings
  • (C) Current Liabilities
  • (D) Reserve and Surplus
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ID- 4750

8. Debentures that are transferred by mere delivery are called:

  • (A) Registered Debentures
  • (B) First Debentures
  • (C) Bearer Debentures
  • (D) None of these
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9. If debentures of ₹ 4,50,000 are issued for the consideration of net assets of ₹ 5,00,000 balance of ₹ 50,000 will be credited to:

  • (A) Profit & Loss Statement
  • (B) Goodwill A/c
  • (C) General Reserve A/c
  • (D) Capital Reserve A/c
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ID- 4752

10. In case of issue of debentures as collateral security for a loan from the bank which account will be debited:

  • (A) Bank Account
  • (B) Bank Loan Account
  • (C) Debentures Account
  • (D) Debentures Suspense Account
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11. Zero Coupon Bonds are an issue:

  • (A) At Zero Interest Rate
  • (B) With specified rate of interest
  • (C) Without specified rate of interest
  • (D) None of these
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ID- 4754

12. Debentures are usually .................. a company's assets:

  • (A) Secured
  • (B) Unsecured
  • (C) Partly Secured
  • (D) Half Secured
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ID- 4755
BSEB, 2017

13. Debenture holder receives:

  • (A) Dividend
  • (B) Interest
  • (C) Both Dividend and Interest
  • (D) Bonus
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ID- 4756

14. Loss on the issue of debentures is generally written off in:

  • (A) 5 years
  • (B) 10 years
  • (C) 15 years
  • (D) Within the life of debentures
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ID- 4757
BSEB, 2013

15. Debenture holder gets:

  • (A) Dividend
  • (B) Profit
  • (C) Interest
  • (D) Bonus
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ID- 4758

16. F Ltd. purchased machinery for a book value of ₹ 4,00,000. The consideration was paid by the issue of 10 % Debentures of ₹ 100 each at a discount of 20%. The debenture account will be credited by:

  • (A) ₹ 4,00,000
  • (B) ₹ 5,00,000
  • (C) ₹ 3,20,000
  • (D) ₹ 4,80,000
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ID- 4759
BSEB, 2013

17. The holders of debentures have the right to convert their Debentures into shares after a specified period as per the terms at their option, such debentures are called:

  • (A) Redeemable Debentures
  • (B) Irredeemable Debentures
  • (C) Convertible Debentures
  • (D) Bearer Debentures
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ID- 4760

18. 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
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ID- 4761
BSEB, 2011, 16

19. Debentureholders are the:

  • (A) Customers of the company
  • (B) Owners of the company
  • (C) Creditors of the company
  • (D) None of these
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ID- 4762
BSEB, 2010, 16

20. Debenture is a:

  • (A) Loan certificate
  • (B) Cash certificate
  • (C) Credit certificate
  • (D) None of these
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ID- 4763
BSEB, 2017

21. A company discount on the issue of debentures is:

  • (A) Capital Loss
  • (B) Revenue Loss
  • (C) General Loss
  • (D) None of these
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ID- 4764

22. Debenture Application Account is in the nature of:

  • (A) Real Account
  • (B) Personal Account
  • (C) Nominal Account
  • (D) None of the above
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ID- 4765

23. Discount on the issue of debentures is recorded as:

  • (A) Intangible Assets
  • (B) Current Assets
  • (C) Current Liability
  • (D) Miscellaneous Expenditure
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ID- 4766

24. Consideration of Debenture is:

  • (A) Profit
  • (B) Dividend
  • (C) Interest
  • (D) None of these
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ID- 4767

25. Which of the following is false?

  • (A) A company can issue redeemable debentures
  • (B) A company can issue debentures with voting rights
  • (C) A company can buy its own shares
  • (D) A company can buy its own debentures
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ID- 4768

26. Premium on Redemption of Debenture A/c is:

  • (A) Asset
  • (B) Liability
  • (C) Expense
  • (D) Revenue
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ID- 4769

27. A company issued 1,00,000, 12% debentures of ₹ 100 each. The amount of interest on debentures will be:

  • (A) 12,000
  • (B) 1,20,000
  • (C) 12,00,000
  • (D) None of these
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ID- 4770

28. Collateral security is a:

  • (A) First security
  • (B) Subsidiary security
  • (C) Normal security
  • (D) None of these
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29. Debenture premium can be used to:

  • (A) Write off the discount on issue of shares or debentures
  • (B) Write off the premium on redemption of shares or debentures
  • (C) Write off capital loss
  • (D) All of the above
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30. Debenture is the part of:

  • (A) Share Capital
  • (B) Long-term Borrowings
  • (C) Owned Capital
  • (D) None of these
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31. Premium on redemption of debentures account is:

  • (A) A real account
  • (B) A nominal account
  • (C) A personal account
  • (D) None of these
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ID- 4774

32. Discount or Loss on Issue of Debentures is shown as/ins:

  • (A) Deduction from Securities Premium Reserve
  • (B) Assets side of Balance Sheet
  • (C) Cr. side of Profit & Loss Account
  • (D) Realisation Account
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33. Convertible Debentures can not be issued at a discount if:

  • (A) They are to be immediately converted
  • (B) They are not to be immediately converted
  • (C) None of these
  • (D) Both
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34. Debenture holders are called ................. of the company:

  • (A) Creditors
  • (B) Debtors
  • (C) Owners
  • (D) Bankers
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35. Generally, debentures are:

  • (A) Secured
  • (B) Unsecured
  • (C) Partly Secured
  • (D) None of these
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ID- 4778
BSEB, 2016, 19

36. The rate of interest on debentures is:

  • (A) 12 % p.a.
  • (B) 20 % p.a.
  • (C) Fixed Rate
  • (D) 15 % p.a.
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37. Debentures represent:

  • (A) Director's share in a company
  • (B) Investment by Equity Shareholders
  • (C) Long-term Debt of the Business
  • (D) None of these
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ID- 4780

38. Discounts on issue of debentures should be written off:

  • (A) Out of securities premium account
  • (B) Out of capital profits
  • (C) Out of statement of profit and loss
  • (D) In the above order dwring life of the debentures
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39. The balance of discount on debentures is shown in the Balance Sheet on:

  • (A) Assets side
  • (B) Liabilities side
  • (C) Foot Notes
  • (D) None of these
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ID- 4782
BSEB, 2013

40. Debentures carry interest at:

  • (A) 12 % p.a.
  • (B) Fixed Rate
  • (C) 20 % p.a.
  • (D) 6 % p.a.
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41. Premium on the issue of debentures' is shown in the balance sheet under head:

  • (A) Non-current Assets
  • (B) Reserve and Surplus
  • (C) Non-current Liabilities
  • (D) None of these
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ID- 4784

42. Premium on the issue of debentures is a ................ for a company:

  • (A) Revenue Receipt
  • (B) Profit
  • (C) Capital Gain
  • (D) Asset
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