WorksheetsIssue & Redemption of Debentures
Total questions: 20
Worksheet time: 15mins
When debentures are to be repaid out of profits, an equal amount is transferred to (a) .
Own debentures a/c will appear on the (a) side of the balance sheet.
If the purchase price for the debentures excludes the interest for the expired period, the quotation is said to be (a) .
If the purchase price for the debentures includes interest for the expired period, the quotation is said to be (a) .
Discount on issue of debentures, being a (a) loss, can be written off against capital profit of the company.
Interest on Debentures can be paid only when a company makes profit.
Debentures will be repaid only at the time of winding up of the company.
Both are TRUE
Both are FALSE
TRUE, FALSE
FALSE, TRUE
Interest on Sinking fund investment is credited to Profits & Loss A/c.
Gain on sale of Sinking fund investments is to be credited to Debentures A/c.
Both are TRUE
Both are FALSE
TRUE, FALSE
FALSE, TRUE
According to companies (Amendment) Act 1999, the premium on issue of debentures should be credited to:
Share premium A/c
Securities Premium A/c
Debenture Premium A/c
P&L A/c
Discount on issue of Debentures is shown under the following heading in a company's Balance sheet.
Fixed Assets
Investments
Loans & Advances
Miscellaneous Expenditure
When debenture are repaid out of capital, entry for the transfer of profits to Debenture redemption reserve a/c is not passed in the books.
DRR is not necessary for banking companies.
Both are TRUE
Both are FALSE
TRUE, FALSE
FALSE, TRUE
Those debentures which are repaid before other debentures are paid out are known as First debentures.
Own debentures can be cancelled only on dates when interest becomes payable on debentures.
Both are TRUE
Both are FALSE
TRUE, FALSE
FALSE, TRUE
A company is not allowed to buy its own debentures in the open market.
A company can write off discount on issue of debentures to profit & loss account.
Both are TRUE
Both are FALSE
TRUE, FALSE
FALSE, TRUE
Both premium on debentures and premium on redemption of debentures carry the same meaning.
Debentures can be issued at discount and can be redeemed at par.
Both are TRUE
Both are FALSE
TRUE, FALSE
FALSE, TRUE
Interest on debentures is normally payable:
Monthly
Quarterly
Half Yearly
Annually
The balance of Sinking fund investment a/c after the realization of investments is transferred to:
Profit & Loss A/c
Sinking Fund A/c
Debenture A/c
Debenture Redemption Reserve A/c
After redemption of debentures, the balance in the Sinking fund a/c is transferred to:
Secret reserve
Capital reserve
General reserve
Debenture Redemption Reserve
Own debentures a/c (at the time of purchase of own debentures) is always to be debited with:
the fair value
the price
the cum-interest price
the ex-interest price
A fixed percentage of interest on debentures is calculated on:
The issue price of Debentures
The nominal value of debentures
The face value of debentures plus premium
All of the above
Profit on cancellation of own debentures is transferred to:
Profit & Loss A/c
Capital Reserve
Dividend equalisation A/c
Capital Redemption Reserve
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