Quiz  /  Debentures Class 12 MCQ Questions With Answers

  • 1. 
    As a purchase consideration of a machinery of Rs 720000, debentures of Rs 100 each were issued at a premium of Rs 25 by company. The number of debentures issued by company is:

  • 7200
  • 7000
  • 6570
  • 5760

  • 2. 
    9-General reserve appearing at the time of dissolution is transferred to

  • Option 1*(a) Bank A/c
  • Option (b) Realisation A/c
  • c) Capital A/c

  • 3. 
    5-at the time of dissolution of firm, assets taken over by partner should be

  • a) credited to realisation account
  • B)credited to partner capital account
  • C) debited to realization account
  • D) none of the above

  • 4. 
    When debentures are issued at a discount, the discount is written off

  • After debentures have been redeemed
  • In the year when debentures are issued
  • During the life of the debentures
  • None of these

  • 5. 
    Which of the following is correct with respect to debentures

  • They can be issued on credit
  • They can be issued for consideration other than cash
  • They cannot be issued as collateral security
  • They can be issued partly on credit and partly in cash

  • 6. 
    PROFIT ON CANCELLATION OF OWN DEBENTURES IS

  • REVENUE PROFIT
  • CAPITAL PROFIT
  • OPERATING PROFIT
  • TRADING PROFIT

  • 7. 
    Luxor pens ltd. issued 10,000, 7% debentures of Rs. 100 each at a discount of Rs. 4 redeemable at a premium of Rs. 6. It will write of loss on issue of debentures

  • From securities premium reserve
  • From statement of profit and loss
  • From general reserve
  • None of these

  • 8. 
    When debentures are issued as collateral securities, the final entry for recording the collateral debentures in the books is

  • Dr Bank A/c Cr Debenture Suspense A/c
  • Dr Bank A/c Cr Debenture A/c
  • Dr Debenture Suspense A/c Cr Bank A/c
  • Dr Debenture Suspense A/c Cr Debenture A/c

  • 9. 
    IF A COMPANY HAS DECIDED TO REDEEM ITS DEBENTURE TOTALLY OUT OF PROFITS THEN HOW MUCH AMOUNT WILL BE TRANSFERRED TO DEBENTURE REDEMPTION RESERVE A/C?

  • 25%
  • 50%
  • 100%
  • NO AMOUNT

  • 10. 
    Electronics ltd. issued 10,000, 6% debentures of Rs. 100 each at a premium of Rs. 10. It will credit 6% debentures account by

  • Rs. 11,00,000
  • Rs. 10,00,000
  • Rs. 9,00,000
  • Rs. 8,00,000

  • 11. 
    HP ltd. issued 5000, 8% debentures of Rs. 100 each at Rs. 95. It will credit 8% debentures account by

  • Rs. 5,00,000
  • Rs. 4,75,000
  • Either (a) or (b) as it decides
  • Rs. 5,25,000

  • 12. 
    Debentures are shown in the balance sheet of a company under the head of

  • Non current liabilities
  • Current liabilities
  • Share Capital
  • None of these

  • 13. 
    ABC limited issues 10,000 9% debentures of 100 each at a premium of 5% , repayable at a premium of 10%, the loss on issue of debentures account will be debited to by -

  • Rs10,00,000
  • Rs1,00,000
  • Rs10,50,000
  • Rs1,05,000

  • 14. 
    Discount on issue of debentures can be written off during the life time of debentures

  • True
  • False

  • 15. 
    A Debenture is:

  • an oral or written instrument acknowledging a debt by a company
  • An oral acknowledgement of debt by a company
  • A written instrument acknowledging a debt taken by a company
  • None of these

  • 16. 
    William pens ltd. issued 10,000, 7% debentures of Rs. 100 each at a discount of Rs. 4. It has a balance in securities premium reserve of Rs. 25,000. It will write off discount on issue of debentures

  • Rs. 40,000 from securities premium reserve
  • Rs. 40,000 from statement of profit and loss
  • Rs. 25,000 from securities premium reserve and Rs. 15,000 from statement of profit and loss (finance cost)
  • Rs. 15,000 from securities premium reserve and Rs. 25,000 from statement of profit and loss (finance cost)

  • 17. 
    Interest payable on debentures is calculated on issue price of debentures.

  • True
  • False

  • 18. 
    What is meant by a Debenture ?

  • Debenture is an oral acknowledgement of debt taken by company
  • Debenture is a written acknowledgement of debt taken by company
  • Debenture may be written or oral acknowledgement of debt taken by company
  • None of these

  • 19. 
    X LTD REDEEMED 6,000 , 8% DEBENTURES OF RS 100 EACH AT 105% BY CONVERTING THEM INTO EQUITY SHARES OF RS 10 EACH AT RS 12. STATE THE NO. OF EQUITY SHARES ISSUED?

  • 52,500
  • 55,000
  • 51,500
  • 56,500

  • 20. 
    Debenture interest is paid

  • At a predetermined rate
  • At variable rate
  • At a rate based on net profit of the company
  • At a rate as determined by the company from time to time

  • 21. 
    WHERE IS DEBENTURE REDEMPTION RESERVE TRANSFERRED AFTER THE REDEMPTION OF ALL DEBENTURES

  • CAPITAL RESERVE A/C
  • GENERAL RESERVE A/C
  • STATEMENT OF PROFIT AND LOSS
  • SINKING FUND ACCOUNT

  • 22. 
    Debentures issued as collateral security

  • Are recorded in the books
  • Are not recorded in the books
  • May or may not be recorded in the books
  • None of these

  • 23. 
    Debentures are a part of

  • Shareholders' fund
  • Borrowed funds
  • Borrowings from Bank
  • None of these
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