CBSE Class 12 Accountancy Issue Of Debentures MCQs Set C

Question: Premium received on issue of debentures may be utilised for writing off:
a) Premium allowed on redemption of debentures
b) Writing off preliminary expenses
c) Writing off discount allowed on issue of shares
d) All of the above
Answer: d

Question: A company redeemed 1,000 6% Debentures of Rs 100 each at 10% premium out of profit. What will be amount transferred to Debenture Redemption Reserve?
a) Rs 25,000
b) Rs 15,000
c) Rs 50,000
d) Rs 1,00,000
Answer: d

Question: Debentures which are transferable by mere delivery are:
a) Registered debentures
b) First debentures
c) Bearer debentures
d) Second debentures
Answer: c

Question: When 100 debentures are issued at 5% discount of Rs 100 each but redeemable at premium of 8%, how much amount will be credited to Premium on Redemption of Debentures account?
a) 5,000
b) 4,000
c) 8,000
d) 6,000
Answer: c

Question: XYZ Ltd issued 4,000, 12% debentures of Rs 100 each at a premium of 5%. The total amount of interest for one year will be:
a) 48,000
b) 58,000
c) 50,000
d) 50,400
Answer: a

Question: A Ltd took over the assets of Rs 6,60,000 and liabilities of Rs 80,000 of B Ltd for an agreed purchase consideration of Rs 6,00,000 payable 10% in cash and the balance by issue of 15% debentures of Rs 100 each at 10% discount. The number of debentures to be issued is:
a) 6,600
b) 5,400
c) 6,000
d) 4,500
Answer: b

Question: Collateral security means ___________ security:
a) Primary
b) Secondary
c) Government
d) Valuable
Answer: b

Question: A company issued 1,000 7% Debentures of Rs 100 each at 5% premium and repayable at 10% premium. What will be the amount of Loss on Issue of Debentures?
a) Rs 5,000
b) Rs 10,000
c) Rs 15,000
d) Rs 20,000
Answer: b

Question: Interest on debentures is calculated on:
a) Its face value
b) Its issue price
c) Its book value
d) Its cost price
Answer: a

Question: When debentures are issued at discount and redeemable at a premium, which one of the following accounts is debited at the time of issue?
a) Debentures account
b) Premium on Redemption of Debentures account
c) Loss on Issue of Debentures account
d) None of these
Answer: c

Question: ABC Ltd issued 10,000 9% Debentures of Rs 100 each at a premium of 5%, repayable at a premium of 10%. The Loss on Issue of Debentures account will be debited by:
a) Rs 10,00,000
b) Rs 1,00,000
c) Rs 10,50,000
d) Rs 1,05,000
Answer: b

Question: What is the nature of Premium on Redemption of Debentures account?
a) Real account
b) Nominal account
c) Personal account
d) None of the above
Answer: c

Question: Debenture interest:
a) Is payable only in case of profits
b) Accumulates in case of losses or inadequate profits
c) Is payable irrespective of profit or loss
d) None of the above
Answer: c 

FILL IN THE BLANKS:

Question: If X ltd purchased plant worth Rs5 lakh from Y ltd but agreed to issue 5250 10% Debentures of Rs100 each to Vendor. The difference in the amount will be adjusted in ____________account.
Answer: goodwill

Question: __________________Debentures are not secured with a specific asset rather they are secured on all the assets of the company in general. 
Answer: floating

Question: _____________is the rate at which interest is payable on Debentures.
Answer: coupon rate

Question: Interest on debentures is paid on the _____________of Debentures.
Answer: Face value

Question: When redemption in out of profit , ______ percent of reedemable debentures are debentures is to be transfer to debenture redemption reserve.
Answer: 100%

Question: When debentures are repayable after a specific time , it is called ________ of debentures
Answer: Redemption

Question: Debenture holder are the _________ of the company.
Answer: creditors

Question: After redemption of debentures Debenture Redemption Reserve is transferred to________ account.
Answer: General reserve

Question: From the point of view of security; _______ and ________ are the type of debentures.
Answer: secured, unsecureD

Question: Interest on debenture is charge against ________ and is to be paid even if there is no profit in the company.
Answer: profit

Question: A debenture is said to be issued at a discount when the issue value is _______ than its nominal value
Answer: less

Question: A collateral security is a _______ security besides the primary security when a company obtains a loan from a Bank or any other financial institution.
Answer: secondary

Question: __________ Debentures are those which are payable on the expiry of the specific period either in lump sum or in installments’.e
Answer: Reedemabl

Question: At the time of redemption debenture redemption reserve is compulsory
Answer: False

Question: Debentures can be redeemed at premium
Answer: True

Question: Profit on sale of redemption investment will be transferred to capital reserve
Answer: True

Question: A debenture can get his money back only at the liquidation of the company
Answer: False

Question: Unsecure debentures can be issued in India
Answer: False

Question: Debenture redemption reserved is transferred to capital reserve after redemption
Answer: False

Question: A debenture holders is the owner of the company
Answer: False

Question: Premium on redemption of debenture account is shown under the Security premium in the balance sheet
Answer: False

Question: A debenture is written instrument acknowledging a debt
Answer: True

Question: Debenture include debenture/stock/ bond or another security of company weather constituting a charge an the assets of company or not
Answer: True