Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:
Debentures of the company are :
Options:
Written document
Debt
Issued under common seal
All of these
Correct Answer:
All of these
Explanation:
A debenture derives its name from the Latin word "debere," which signifies borrowing. It serves as a written financial instrument authenticated by a company's common seal, effectively acknowledging a debt. This document outlines an agreement for repaying the principal amount either after a designated period, at specified intervals, or upon the company's discretion. Additionally, it commits the company to pay interest at a predetermined rate, typically on fixed dates, which may occur semi-annually or annually.