Match List – I with List – II. List - I List - II (A) Debenture Suspe… | Accountancy Part A CUET question

Match List – I with List – II.

List - I	List - II
(A) Debenture Suspense account	(I) Charge against profit
(B) Current maturities of Debts	(II) Statement of Profit & Loss
(C) Discount on Issue of Debentures	(III) Collateral Security
(D) Interest on Debentures	(IV) Other Current liabilities

Choose the correct answer from the options given below :

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → (A)-(III), (B)-(IV), (C)-(II), (D)-(I)

(A) Debenture Suspense account — this matches (III) Collateral Security. When debentures are issued as collateral security and recorded in the books, Debenture Suspense Account is debited and is shown as a deduction from those debentures.

(B) Current maturities of Debts — this matches (IV) Other Current liabilities. The part of a long-term loan repayable within twelve months is shown under other current liabilities.

(C) Discount on Issue of Debentures — this matches (II) Statement of Profit & Loss. The discount is written off from securities premium, and any balance against the revenue profits of the year in the Statement of Profit and Loss.

(D) Interest on Debentures — this matches (I) Charge against profit. Interest must be paid whether or not the company earns a profit.

NCERT (2026-27 edition):
Issue of Debentures as a Collateral Security

Extract from the NCERT textbook

NCERT (2026-27 edition):
Second Method – “… Debenture Suspense account will appear as a deduction from the debentures in notes to accounts of long-term borrowings.”

NCERT (2026-27 edition):
Borrowings – “… (iii) Current maturities to long-term loan include amount repayable within twelve months/operating cycle under other current liabilities with Note to Account.”

NCERT (2026-27 edition):
Writing off Discount/Loss on Issue of Debentures – “Discount or Loss on issue of debentures is a capital loss and is written-off in the year when debentures are issued. Discount or loss can be written-off from securities premium reserve [section 52(2)]. In case, capital profit do not exist or are inadequate, the amount should be written off against revenue profits of the year.”

NCERT (2026-27 edition):
Interest on Debentures – “… Interest on debenture is a charge against the profit of the company and must be paid whether the company has earned any profit or not.”