Match the following-

Choose the correct answer from the options given below-

A- IV, B- III, C- I, D- II

The correct answer is option 2- A- IV, B- III, C- I, D- II.

* Debentures- The return on shares is known as dividend while the return on debentures is called interest. The rate of return on shares may vary from year to year depending upon the profits of the company but the rate of interest on debentures is prefixed. The payment of dividend is an appropriation of profits, whereas the payment of interest is a charge on profits and is to be paid even if there is no profit.

* Shares- The return to shareholders is called dividend.  It is paid first to preference shareholders and then equity shareholders.

* Issued debentures as Collateral security- Debenture Suspense account is an adjustment account which is prepared at the time of issue of debentures as collateral security. They are debited because it is a temporary account created to record Debentures on the credit side and when the loan is repaid, a reverse entry is passed to cancel the debentures issued.

* Received over subscription- When the number of debentures applied for is more than the number of debentures offered to the public, the issue is said to be over subscribed. A company, however, cannot allot more debentures than it has invited for subscription. The excess money received on over subscription may, however, be retained for adjustment towards allotment and the respective calls to be made. But the money received from applicants to whom no debentures have been allotted, will be refunded to them.