Tag: discount/loss on issue of debenture written off

Questions Related to discount/loss on issue of debenture written off

Consider the following statements-Current ratio is increased by

    1. issue of redeemable preference shares.
    2. selling of old furniture for cash.
    3. cash realized from debtors.
    Which of the statements given ab

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. 1 and 2 only

    2. 2 and 3 only

    3. 1 and 3 only

    4. 1, 2 and 3

    Show answer
    Correct Option: A

    Discount on issue of debenture A/c is to be written off ___________.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. immediately

    2. within 3-4 years

    3. over the tenure of the debenture

    4. all the three alternatives are available to the company

    Show answer
    Correct Option: C

    The issue of debentures less than the face value is called_______.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. at par

    2. at premium

    3. at discount

    4. none of these

    Show answer
    Correct Option: C
    Explanation:

    When debentures are issued by the company at a price less than its nominal value (face value), it is said to be issued at discount.

    A debenture is said to be issued at discount when the issue price is _____ the face price.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. more than

    2. less than

    3. equal to

    4. double than

    Show answer
    Correct Option: B

    A company issued 12% debentures of Rs. 1000 each at Rs. 900 to be redeemable at Rs. 1050. The difference of Rs. 150 will be ___________.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. debited to loss on issue of Debenture A/ c

    2. credited to loss on issue of Debenture A/c

    3. preliminary expenses A/c

    4. capital loss A/c

    Show answer
    Correct Option: A

    Loss on issue of Debentures is generally written off in __________.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. 10 years

    2. 8 years

    3. over the period of debentures

    4. 15 years

    Show answer
    Correct Option: C

    The document inviting offers from public to subscribe for the debenture or shares or deposits of a company is a

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. Share certificate

    2. Articles of association

    3. Fixed deposit receipt

    4. Prospectus

    Show answer
    Correct Option: D

    Debenture interest -

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. is payable only is case of profits

    2. accumulates in case of losses or inadequate profits

    3. is payable after the payment of preference dividend but before the payment of equity dividend

    4. is payable before the payment of any dividend on shares

    Show answer
    Correct Option: D

    Which of the following statements is true?

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. A debenture holder is an owner of the company.

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

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

    4. A debenture holder receives interest only in the event of profits.

    Show answer
    Correct Option: C

    ABC Ltd. purchased Machinery from Kumar Company for a book value of Rs. 2,00,000. The consideration was paid by issue of 10% debentures of Rs. 100 each at a discount of 20%. The debenture account was credited with ____.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. Rs. 4,00,000

    2. Rs. 2,50,000

    3. Rs. 3,20,000

    4. Rs. 4,80,000

    Show answer
    Correct Option: B