Issue & Redemption of Debentures

1. Debentures can be issued for a consideration other than for cash, such as for purchasing land, machinery etc.

• TRUE

• FALSE

1. At the time of liquidation, debenture holders are paid off after the shareholders.

• TRUE

• FALSE

1. Debentures suspense account appears on liability side of balance sheet.

• TRUE

• FALSE

1. At redemption of debentures, DRR should be transferred to general reserve.

• TRUE

• FALSE

1. All India Financial Institutions (AIFIs) regulated by Reserve Bank of India and Banking Companies for both public as well as privately placed debentures need not create any Debenture Redemption Reserve (DRR).

• TRUE

• FALSE

1. When companies issue their own debentures as collateral security for a loan, the holder of such debenture is entitled to interest only on the amount of loan and not on the debentures

• TRUE

• FALSE

1. If a company incurs loss, then it does not pay interest to the debenture holders.

• TRUE

• FALSE

1. Debenture holder are the owners of the company.

• TRUE

• FALSE

1. Amounts credited to the debenture redemption reserve may be utilised by the company for any purpose.

• TRUE

• FALSE

1. Under payment in instalments method, the payment of entire debenture is made in one lot.

• TRUE

• FALSE