Class 12 Accountancy Chapter 2 (Part 2) - Issue and redemption of debentures MCQs

Class 12 Accountancy Chapter 2 (Part 2) – Issue and redemption of debentures MCQ Question Answers for CUET 2024

1. Renegades Ltd. issues 20,000, 9% debentures of Rs.100 each at a discount of 5% redeemable at the end of 5 years at a premium of 6%. For what amount ‘Loss on Issue of Debentures Account’ will be debited?

a.255000

b.222500

c.300000

d.220000

2. Wellington Ltd. Bought a Machinery for Rs.5,00,000 payable as 15% in cash and balance by allotment of 9% debentures of Rs.100 each at a premium of 25%. Number of debentures issued will be:

a.3,400

b.4,250

c.5,000

d.4,000

3. Interest accrued and due on debentures is shown under which main head?

a.Non-Current Liabilities

b.Reserves and Surplus

c.Share Capital

d.Current Liabilities

4. Discount on issue of debentures to be written off within 12 months of the balance sheet date or the period of operating cycle is shown under _____

a.Reserves and Surplus

b.Current Assets

c.Other Current Assets

d.Other Current Liabilities

5. Discount or Loss on issue of debentures is a ______and is written-off in the year when debentures are issued.

a.Capital Loss

b.Revenue Expenses

c.Capital Profit

d.Revenue Loss

6. Profit on cancellation of own debentures is transferred to _____________

a.Statement of profit and loss

b.General Reserve Account

c.Debenture Redemption Reserve

d.Capital reserve.

7. A ______may be defined as a subsidiary or secondary or additional security besides the primary security when a company obtains a loan or overdraft from a bank or any other financial Institution

a.Securities Premium

b.collateral security

c.Debenture Loan

d.Shares Loan

8. Rajesh & co. Ltd. purchased assets worth Rs. 28,80,000. It issued debentures of Rs. 100 each at a discount of 4 per cent in full satisfaction of the Purchase Consideration. The number of debentures issued to vendor is:

a.320000

b.33000

c.30000

d.35000

9. On payment of tax deducted at source to the Government Which Account is debited ___. (Payment of tax deducted at source on interest on debentures)

a.Income Tax Payable A/c

b.Bank A/c

c.Income tax Interest Accrued A/c

d.Interest A/c

10. Excess value of net assets over purchase consideration at the time of purchase of business is credited to:

a.Revaluation Reserve

b.Vendors’ account

c.Capital reserve,

d.General reserve,

11. Question

a.25%

b.20%

c.5%

d.15%

12. Question

a.c

b.b

c.d

d.a

13. Using Second Method, Which Account Is to debited When Debentures are Issued of 10,000, 9% debentures of Rs. 100 each as collateral security for bank loan of Rs. 10,00,00

a.9% Debentures A/c

b.Loan Account

c.Debenture Suspense A/c

d.Interest On Debentures A/c

14. If Vendors are issued debentures of Rs.4,40,000 in consideration of assets of Rs. 5,00,000 and liabilities of Rs. 1,00,000, the balance of Rs.40,000 will be debited to:

a.Goodwill Account

b.General Reserve Account

c.Statement of Profit & Loss

d.Capital Reserve Account

15. Which of the following statement is false?

a.A company can issue redeemable debentures.

b.A company can issue debentures with voting rights

c.A company can issue convertible debentures & Non-Convertible Debentures

d.A company can buy its own debentures and shares

16. When Debentures are issued at a discount, Which Account Is Debited

a.Both A and B

b.Discount on Issue of Debenture A/c

c.Debentures A/c

d.Vendors A/c

17. When debentures are to be redeemed at premium an extra entry has to be made at the time of issue of debentures, which A/c should be credited in entry?

a.Debenture redemption premium A/c

b.Debenture Suspense A/c

c.Debenture A/c

d.Premium on issue of debentures A/c

18. Debentures are Classified Based on What Basis?

a.Coupon Rate

b.Security

c.Mode Of Redemption

d.All of The Above

19. Way(s) of Redemption of Debentures

a.Conversion into Shares or New Debentures

b.Only A and C