Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:
When the charge is on a specific asset in case of issue of secured debentures, Then this charge is called:
Options:
Fixed charge
Floating charge
Either option 1 or 2
None of these
Correct Answer:
Fixed charge
Explanation:
Secured debentures refer to those debentures where a charge is created on the assets of the company for the purpose of payment in case of default. The charge may be fixed or floating. A fixed charge is created on a specific asset.