Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Issue and Redemption of Debentures

Question:

In general, Debentures indicate which of the following?

Options:

Short-term Borrowings of a Company

The Investment of Preference Shareholders

The Investment of Equity Shareholders

Long-term Borrowings of a Company

Correct Answer:

Long-term Borrowings of a Company

Explanation:

The correct answer is option 4- Long-term Borrowings of a Company.

Debentures indicate Long-term Borrowings of a Company.

Debentures are a form of long-term debt instrument issued by a company to raise capital. They typically involve the company borrowing money from investors and agreeing to pay them interest over a set period, with the repayment at maturity. Long term borrowings are the types of loan that will be repayable after 12 months.