CUET Preparation Today
Which of the following statements is false? |
At maturity, the debenture holder gets back their money Debentures are shown as long-term borrowings Interest on debentures is a charge against profits Debentures can be forfeited for non-payment of call money |
Debentures can be forfeited for non-payment of call money |
The correct answer is option 4- Debentures can be forfeited for non-payment of call money. Debenture is a loan to company. Forfeiture applies to shares, not to debentures. When shareholders fail to pay call money, their shares can be forfeited. However, debentures represent a loan, and debenture holders are creditors, not owners. Non-payment issues in debentures are handled differently (e.g., legal action or withholding interest), but forfeiture is not applicable. |
