Practice Test

Q1) Debenture holder are ______ of the company Show Answer

Q2) Debenture holders . Show Answer

Q3) Debentures may be issued at . Show Answer

Q4) Debenture interest is paid at a pre determined while dividend on equity shares is paid at a ________ and on preference shares is paid at a ________ Show Answer

Q5) Interest on debenture is the against profits Show Answer

Q6) In the company's balance sheet, debenture are shown under the head . Show Answer

Q7) Debentures _______ converted in to shares as per the terms of issue of debenture. Show Answer

Q8) Debenture _____forfeited for non payment of call money. Show Answer

Q9) At the time of liquidation, debenture holder are paid-off _____ the shareholder are paid. Show Answer

Q10) If the debentures are issued at a price higher than the nominal value of the debentures, the premium should be credited to . Show Answer

Q11) If the debenture are issued at price less than the face value of the debentures, the debentures are said to be issued at a . Show Answer

Q12) Discount on issue of share is . Show Answer

Q13) Discount on issue of debenture being a capital loss must be shown specifically on the assets side of the balancesheet under the heading of Show Answer

Q14) Debenture may be issued by a company for Show Answer

Q15) The company may allot debenture to the vendors for acqurinig some assets as payment of purchase consideration, such issue debentures to the vendors is known as issue of debenture for . Show Answer

Q16) If the value of debentures alloted to vendors for acqurining some assets as payment for purchase consideration is more than the agreed purchase price, the difference is debited to . Show Answer

Q17) If the value of debentures alloted to vendors for acqurining some assets as payment for purchase consideration is less than the agreed purchase price, the difference is credited to Show Answer

Q18) When debenture are issued as colletral security which of the following accounting treatment can be adopted? Show Answer

Q19) ZPA ltd. issued 10000, 12% debenture of Rs.100 each at par payable in full on application by 1st april,2010. Application were received for 11000 debentures. Debentures were alloted on 7th april, 2010 Excess money was refunded. Amount that will appear in balancesheet as 12% debenture=? Show Answer

Q20) Z ltd. issued 10000, 12% debenture of Rs.100 each at a discount of 10% payable in full on application by 31st may,2010. Application were received for 12000 debentures. Debentures were alloted on 9th june, 2010 Excess monies wer refunded on the same date. Amount that will appear in balancesheet as 12% debenture=? Show Answer

Q21) HDC ltd issued 10000, 12% debenture of Rs.100 each at Rs.94 on 1st jan 2010. under the terms of issue, 1/5th of the debenture are annually redeemable by drawings, the first redemption occuring on 31st dec 2010. calculate the amount of discount to be w/off in 2010 & 2011. Show Answer

Q22) Z ltd issued 10% debenture of Rs.100 to a vendor having face value Rs.250000 for purchase of fixed assets of Rs. 200000 No. of debenture to issue to vendor=? Show Answer

Q23) ZPA ltd issued 10000, 12% debenture of Rs.100 each at Rs.94 on 1st jan 2010. under the terms of issue, the debentureare redeemble at the end of 8 years from the date of the issue. calculate the amount of discount to be w/off in each of the 8 years. Show Answer

Q24) X ltd. obtained loan from IDBI of Rs.10,00,000 giving as colletral security of Rs.15,00,000, 14% Debenture on 1st april 2011. Which of the following accounting treatment is correct to issue debenture as colletral security? Show Answer

Q25) Unless written off, the loss on issue of debenture is shown: Show Answer

Q26) If debenture are issued as consideration for purchase of any fixed asset, the entry is : Show Answer

Q27) When debenture are issued as collateral security, the final entry for recording the transaction in the books is : Show Answer

Q28) Interest Payable on debentures is: Show Answer

Q29) A company issues 14%, debentures of Rs 10,00,000 at a discount of 10%. The discount allowed will be treated in the account books as: Show Answer

Q30) When debentures are issued at par and are redeemable at premium, this credit given to Premium of Redemption of Debenture Account is in the nature of : Show Answer

Q31) Loss on issue of debentures is treated as: Show Answer

Q32) The following journal entry appears in the books of X Co. Ltd:
Bank A/c Dr. Rs 4,75,000
Loss on Issue of Debenture A/c Dr. Rs
25,000
To 12% Debenture A/c Rs 5,00,000
Debentures have been at a discount of: Show Answer

Q33) X Co. Ltd. purchased assets worth Rs 28,80,000. It issued debentures of Rs 100 each at a discount of 4% in full satisfaction of the purchase consideration. The number of debentures issued to the vendors of asset are : Show Answer

Q34) How many debentures will a company be required to issue for satisfying the purchase consideration of Rs 28,80,000, if debentures of Rs 100 are issued at a premium of Rs 20 per debenture? Show Answer

Q35) F Ltd. purchased machinery from G company for a book value of Rs 4,00,000. The consideration was paid by issue of 10% debentures of Rs 100 each at a discount of 20%. The debenture account will be credited by: Show Answer

Q36) T Ltd. has issued 15% Debentures of Rs 20,00,000 at a discount of 10 % on April 01,2004 and the company pays interest half-yearly on June 30 and December every year. On March 31, 2006, the amount shown as "interest accrued but not due" in the Balance Sheet will be: Show Answer

Q37) When debentures of Rs 1,00,000 are issued as Collateral Security against a loan Rs 1,50,000, the entry for issue of debentures will be: Show Answer

Q38) P Ltd. issued 10,000, 12% debentures of Rs 100 each at a premium of 10%, which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year will be Show Answer

Q39) On May 01, 2003, Y Ltd. issued 7% , 40,000 convertible debentures of Rs 100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31,2004 is: Show Answer

Q40) W Ltd. issued 20,000, 8% debentures of Rs 10 each at par which are redeemable after 5 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is: Show Answer

Q41) which of the following is not a characteristic of Bearer Debentures? Show Answer

Q42) The debentures which are secured by a charge upon some or all assets of the company are known as: Show Answer

Q43) When debentures are to be redeemed at premium an extra entry has to be made at the time of issue of debentures, which a/c should be credited in this entry? Show Answer

Q44) When debentures are issued at a discount, it is prudent to write off the discount: Show Answer

Q45) Tahil Ltd. has issued 14% Debentures of Rs 20,00,000 at a discount of 10% on April 01, 2005 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2007, the amount shown as "interest accrued but not due" in the balance sheet will be; Show Answer

Q46) XYZ Ltd. purchased a machinery for Rs 10,00,000 from Mohan Ltd. and the consideration was paid by the issue of 18% debentures of Rs 100 each at a discount of 20%. Calculate the number of debentures to be issued: Show Answer

Q47) Yadav Ltd. purchased a building from Gandhi Ltd. for Rs 50,00,000 and the consideration was paid by the issue of debentures of Rs 100 each of premium of Rs 25 each. Calculate the number of debentures to be issued to Gandhi Ltd. Show Answer

Q48) ABC Ltd. purchased a machinery from Microtee Ltd. for Rs 50,00,000 and the consideration was paid by issuing debentures of Rs 100 each at a discount of 20%. Calculate the amount to be credited to the debenture account: Show Answer

Q49) Ram Ltd. purchased a car from Harish Ltd. for 10,00,000 and the consideration was paid by issuing debenture of Rs 10 each at a premium of Rs 2.5 each. Calculate the amount to be credited to Debentures Account: Show Answer

Q50) Morseny Ltd. issued 2,000, 15% debentures of Rs 100 each at a premium of 10% which are redeemable after 10 years at a premium of 20%. The discount of loss on redemption of debentures to be written off every year discount of loss on redemption of debentures to be written off every year is: Show Answer

Q51) ABCD Ltd. issued 1,000 9% debentures of Rs 100 each at a discount of 10%, which will be redeemed after 5 years at a premium of 10%. Calculate the discount on loss of debentures to be written off each year: Show Answer