Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:
In which type of debentures the company does not give any undertaking for the repayment of money borrowed by issuing such debentures?
Options:
Redeemable Debentures
Irredeemable Debentures
Convertible Debentures
Specific Coupon Rate Debentures
Correct Answer:
Irredeemable Debentures
Explanation:
Irredeemable debentures are also known as Perpetual Debentures because the company does not give any undertaking for the repayment of money borrowed by issuing such debentures. These debentures are repayable on the winding-up of a company or on the expiry of a long period.