Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

What is the another name for naked debentures?

Options:

Secured debentures

Mortgaged debentures

Unsecured debentures

None of the above

Correct Answer:

Unsecured debentures

Explanation:

Unsecured debentures lack a specific claim or lien on the assets of the company. In the event of default, it is possible for a floating charge to be created on these debentures, but it's important to note that unsecured debentures with this feature are not commonly issued.