Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:
Debentures are considered as.................equity.
Options:
Internal
External
Both of these
None of these
Correct Answer:
External
Explanation:
Debenture holders are not the owners of the company. That's why they are considered external equity. Debenture holders are lenders who receive fixed interest payments and have a claim on the company's assets but do not have ownership rights or equity in the company.