Students should refer to Class 12 MCQ Questions of Issue of Debentures with Answers to score more marks in Class 12 Accountancy exams. Students should read the chapter Issue of Debentures and then attempt the following objective-type questions.
Issue of Debentures MCQ Class 12 Accountancy provided below covers all important topics given in this chapter. These MCQ Questions will help you to properly prepare for exams and socres high marks in exams. his may assist you to understand and check your knowledge about the chapters.
1. Debenture holders are :
(A) Owners of the Company
(B) Debtors of the Company
(C) Creditors of the Company
(D) Promoters of the Company
2. Debentures represent the :
(A) Long-term Borrowings of a Company
(B) The Investment of Equity-Shareholders
(C) Directors’ shares in a company
(D) Short-term Borrowings of a Company
3. 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
4. Interest payable on debentures is :
(A) an appropriation of profits of the company
(B) a charge against profits of the company
(C) transferred to sinking fund investment account
(D) transferred to general reserve
5. A debenture holder is entitled to :
(A) Fixed dividend
(B) Share in profits
(C) Voting rights in the company
(D) Interest at the fixed rate
6. On liquidation of company, principal amount of debentures is returned :
(A) First of All
(B) Last of All
(C) Before Equity Capital
(D) After Equity Capital
7. Which of the following statements is true?
a) A debenture issued at a discount can be redeemed at a premium
b) A debenture holder is an owner of the company
c) A debenture holder can get his money back only on the liquidation of the company
d) A debenture holder receives interest only in the event of profits
8. Which of the following statements is false?
a) Debentures cannot be secured
b) A company can issue convertible debentures
c) A company can issue redeemable debentures
d) Debentures have no right to participate in profits over and above their fixed interest.
9. Perpetual debentures are also known as
a) Irredeemable debentures
b) Secured Debentures
c) Unsecured Debentures
d) None of the options
10. Debenture premium cannot be used to
a) Pay dividends
b) Write off the discount on issue of shares or debentures
c) Write off the premium on redemption of shares or debentures
d) Write off capital loss
11. Loss on issue of debentures is treated as
a) Miscellaneous expenditure
b) Intangible asset
c) Current asset
d) Current liability
12. Secured Debentures is known as
a) Mortgage debentures
b) Naked debentures
c) Unsecured Debentures
d) None of the options
13. Unsecured Debentures is known as
a) Simple or Naked debentures
b) Mortgage debentures
c) Secured Debentures
d) None of the options
14. Premium on redemption of debentures is generally provided at the time of _______.
(a) Issue of debentures
(b) Redemption of debentures
(c) Writing off
(d) After 10 years
15. Sources of finance of the redemption of debentures are ______.
(a) Redemption out of profits
(b) Redemption out of capital
(c) The proceeds from fresh issue of shares/debentures
(d) All of the above
16. Loss on the issue of debenture account is shown _______.
(a) On the assets side of the balance sheet
(b) On the liabilities side of the balance sheet
(c) On the credit side of the profit and loss account
(d) None of the above
17. When debentures are issued at par and are redeemable at a premium, the loss on such an issue is debited to _______.
(a) Profit and loss A/c
(b) Debenture application and allotment A/c
(c) Loss on the issue of debentures A/c
(d) Premium on redemption A/c
18. 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 A/c
(b) Premium on redemption of debentures A/c
(c) Loss on the issue of debentures A/c
(d) Profit and loss A/c
19. Premium on redemption of debentures A/c is in the nature of ______.
(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(d) None of the above
20. Debentures issued as collateral security will be debited to:
a) Bank Account
b) Debentures Suspense Account
c) Debentures Account
d) Bank Loan Account
21. Debentures are part of
a) Shareholders’ funds
b) Borrowed Funds
c) Borrowings from Bank
d) None of these
22. When debentures of ₹1,00,000 are issued as Collateral Security against a loan of ₹1,50,000, the entry for issue of debentures will be :
a) Credit Debentures ₹1,50,000 and debit bank A/c ₹1,50,000
b) Debit Debenture Suspence A/c ₹1,00,000 and Credit Bank A/c ₹1,00,000
c) Debit Debenture Suspence A/c ₹1,00,000 and Credit Debentures A/c ₹1,00,000.
d) Debit Cash A/c ₹1,50,000 and Credit Bank A/c ₹1,50,000.
23. Debenture holders are:
a) Owners of the Company
b) Debtors of the company
c) Creditors of the Company
d) Promotors of the Company
24. Interest on debentures issued as a collateral security is paid on:
a) Nominal value of debentures
b) No interest is paid
c) Face value of debentures
d) Paid up value of debentures
25. Debentures are shown in the Balance Sheet of a company under the head of
a) Non-current Liabilities
b) Current Liabilities
c) Share Capital
d) None of these
