Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:
Debentures represent:
Options:
Director’s Share in a Company
Long-term Debt of the Business
Investments by Equity Shareholders
None of these
Correct Answer:
Long-term Debt of the Business
Explanation:
A debenture is thus like a certificate of loan or a loan bond evidencing the company's liability to pay a specified amount with interest. Although the money raised by the debentures becomes a part of the company's capital structure, it does not become share capital.