Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

How is a debenture typically authenticated by a company?

Options:

With the CEO's signature

Through a notarized document

Under the common seal of the company

By a handwritten note from the company's president

Correct Answer:

Under the common seal of the company

Explanation:

The correct answer is option 3- Under the common seal of the company.

A debenture is typically authenticated by a company under its common seal. This means that the company's official seal or stamp, which bears its name and registration number, is affixed to the debenture document. This process is a formal and legally recognized way of confirming the authenticity and validity of the debenture, signifying the company's commitment to the terms and conditions outlined in the debenture instrument.