Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

Debentures issued for consideration other than cash includes, debentures:
(A) Issued to bank as additional security
(B) Issued to vendor
(C) Issued to Public
(D) Issued to creditor
(E) Issued for cash

Choose the correct answer from the options given below:

Options:

(C), (B), (A) and (E) only

(A), (B) and (D) only

(A), (D) and (C) only

(B), (D) and (E) only

Correct Answer:

(A), (B) and (D) only

Explanation:

* Debentures issued to the public are typically issued for cash. Therefore, option (C) is incorrect.
* Debentures issued for cash are not issued for consideration other than cash. Therefore, option (E) is incorrect.
* A company may issue debentures to a bank as additional security for a loan.
* A company may issue debentures to a vendor in payment for goods or services.
* A company may issue debentures to a creditor in settlement of a debt.