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Home Questions T396RJQZ99
Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Issue and Redemption of Debentures

Question:

Which of the following statements is true?

Options:

A debenture holder can receive back money only on liquidation

A debenture holder receives interest only in case there are profits

Both options 1 and 2

None of the options 1 and 2

Correct Answer:

None of the options 1 and 2

Explanation:

The correct answer is option 4- None of the options 1 and 2.

A debenture holder can receive back money only on liquidation- THIS IS FALSE as A debenture holder receives his money back after the period of expiry for which the debentures were issued.

A debenture holder receives interest only in case there are profits- THIS IS FALSE as An interest on debenture is a charge on profit and hence the debenture holder will receive interest even if there are no profits in the company.

Hence, both 1 and 2 are wrong.

CUET Questions