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Home Questions W9RTE52QQA
Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below.

Assertion (A):  Debenture holders do not enjoy any voting rights.
Reason (R):  A debenture holder just lends money but does not become an owner of the company with the purchase of debentures.

Options:

Both (A) and (R) are true, and (R) is the correct explanation of (A).

Both (A) and (R) are true, but (R) is not the correct explanation of (A).

(A) is false, but (R) is true.

(A) is true, but (R) is false.

Correct Answer:

Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:

Debenture holders are only the creditors of the company as debentures are part of the borrowed capital of the company. They do not have any voting rights and cannot participate in the company's affairs.

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