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. Debentures are Classified Based on What Basis?

a.Coupon Rate

b.All of The Above

c.Mode Of Redemption

d.Security

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

a.Capital reserve.

b.Debenture Redemption Reserve

c.Statement of profit and loss

d.General Reserve Account

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

a.Revenue Loss

b.Revenue Expenses

c.Capital Loss

d.Capital Profit

4. 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 Interest Accrued A/c

b.Interest A/c

c.Bank A/c

d.Income Tax Payable A/c

5. 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.Interest On Debentures A/c

d.Debenture Suspense A/c

6. 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.4,250

b.5,000

c.4,000

d.3,400

7. 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.Premium on issue of debentures A/c

b.Debenture A/c

c.Debenture redemption premium A/c

d.Debenture Suspense A/c

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

a.Discount on Issue of Debenture A/c

b.Vendors A/c

c.Debentures A/c

d.Both A and B

9. 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.Statement of Profit & Loss

b.Goodwill Account

c.General Reserve Account

d.Capital Reserve Account

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

a.Reserves and Surplus

b.Non-Current Liabilities

c.Share Capital

d.Current Liabilities

11. 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.300000

c.220000

d.222500

12. Way(s) of Redemption of Debentures

a.Payment in Lump sum

b.Purchase From Share Market

c.Only A and C

d.Conversion into Shares or New Debentures

13. Question

a.b

b.a

c.c

d.d

14. Question

a.15%

b.25%

c.20%

d.5%

15. 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.Current Assets

b.Other Current Liabilities

c.Other Current Assets

d.Reserves and Surplus

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

a.General reserve,

b.Revaluation Reserve

c.Capital reserve,

d.Vendors’ account

17. 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.35000

b.33000

c.30000

d.320000

18. Which of the following statement is false?

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

b.A company can issue redeemable debentures.

c.A company can buy its own debentures and shares

d.A company can issue debentures with voting rights

19. Which Option is Correct in Purview of Debentures?

a.A debenture holder can get his money back only on the liquidation of the company.

b.A debenture holder is an owner of the company

c.A debenture holder received interest only in the event of profits

d.A debenture issued at a discount can be redeemed at a premium

20. 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.Debenture Loan

b.collateral security

c.Shares Loan

d.Securities Premium