Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

What is the term used for the issuance of debentures by a company to lenders as Secondary Security?

Options:

Debenture Offering

Secondary Debenture Issuance

Collateral Debentures

Debentures issued as Collateral Security

Correct Answer:

Debentures issued as Collateral Security

Explanation:

The term used for the issuance of debentures by a company to lenders as collateral security is "Debentures issued as Collateral Security." This term specifically describes the situation where a company issues its debentures to lenders as an additional security measure to secure a loan or overdraft. These debentures serve as collateral to protect the interests of the lending institution in case of default by the borrower.