Class 12 Accountancy MCQs Debentures
The questions given here for practice by the students, are based on actual examination. Students must do these after preparing the chapter to have an accurate idea of their preparation.
- Sunflower Ltd. took up a loan from a SBI and issued its 8% Debentures as Collateral Security. The SBI:
a) will be entitled to interest on such debentures.
b) will be entitled to interest on primary security.
c) will not be entitled to interest on such debentures.
d) will not be entitled to interest on loan taken up from the bank.
2. City Ltd. purchased machinery from CT Ltd. for ₹8,00,000. The consideration was paid by issue of 9% Debentures of ₹1,000 each at a discount of 20%. The 9% Debentures account is credited with:
a) ₹10,40,000
b) ₹10,00,000
c) ₹9,60,000
d) ₹6,40,000
3. Tinky Ltd. took over assets of ₹12,00,000 and liabilities of ₹ 4,00,000 of Minky Ltd. for an agreed purchase consideration of ₹9,00,000. The amount was payable by issue of 12% debentures of ₹100 each at 10% discount. The number of debentures issued will be:
a) 9,000
b) 8,000
c) 10,000
d) 11,000
4. When debentures are issued at par and redeemable and premium the loss on such an issue is debited to:
a) profit and loss account
b) debenture application and allotment account
c) loss on issue of debentures account
d) discount on issue of debentures account
5. Premium received on issue of debentures may be utilised for writing off:
a) premium allowed on redemption of debentures
b) writing off preliminary expenses
c) writing off discount allowed on issue of shares
d) all of the above
6. Which of the following statements is incorrect?
a) Interest on debentures is a charge and not an appropriation.
b) Debenture holders do not have voting rights.
c) Debentures cannot be converted into shares.
d) Debentures can be issued at discount.
Read the following hypothetical situation and answer questions number 7. and 8. on the basis of given information.
On 1st April, 2022, Shruti Ltd. issued 5000, 9% Debentures of ₹ 100 each at 5% premium, redeemable at a premium of 10% after 3 years.
7. The total interest due on debentures for the year ending 31st March, 2023 will be:
a) ₹25,000
b) ₹40,000
c) ₹50,000
d) ₹75,000
8. Loss on Issue of Debentures Account should be debited by which of the following amount?
a) ₹50,000
b) ₹40,000
c) ₹75,000
d) ₹25,000
9. Which of the following statements is correct about debentures:
a) New Debentures can be issued at par/premium but not at discount
b) Debenture interest is calculated on issue price
c) Interest is not paid on Debentures issued as Collateral Security
d) Interest on debentures is an appropriation of profits
10. A machine was purchased by Shagun Ltd. for ₹11,00,000 from Moon. Shagun Ltd. issued 8% Debentures of ₹50 each against purchase consideration at a premium of 10%. 8% Debentures Account is credited by:
a) ₹10,00,000
b) ₹12,10,000
c) ₹11,00,000
d) ₹11,90,000
Class 12 Accountancy MCQs Debentures
11. CAE Ltd. took over assets of ₹3,00,000 and liabilities of ₹10,000 of ACE Ltd. for ₹2,70,000 payable by issue of 9% Debentures of ₹100 each at 20% premium. Which of the following statements is correct:
a) Capital Reserve is to be debited with ₹20,000
b) Capital Reserve is to be credited with ₹20,000
c) Goodwill Account is to be debited with ₹20,000
d) Goodwill Account is to be credited with ₹20,000
12. PT Ltd. purchased business of KT Ltd. for ₹9,60,000 payable 25% by cheque and balance by issue of 8% Debentures of ₹100 each at a discount of 4% redeemable at a premium of 6%. 8% Debentures Account is credited with:
a) ₹9,60,000
b) ₹7,20,000
c) ₹10,00,000
d) ₹7,50,000
13. CAE Ltd. had allotted 10,000, 9% Debentures of ₹100 each to the applicants of 14000, 9% Debentures on pro rata basis. Application money payable was ₹20 per Debenture. Twinkle had applied for 420 debentures. The number of debentures allotted and the excess application money adjusted against allotment money due from Twinkle are:
a) 60 Debentures, ₹1,200
b) 300 Debentures, ₹2,400
c) 320 Debentures, ₹2,000
d) 340 Debentures, ₹1,000
14. On 1st April 2023, Mala ltd. had a balance of ₹8,00,000 in Securities Premium account. During the year company issued 20,000 Equity shares of ₹10 each as bonus shares and used the balance amount to write off Loss on issue of Debenture on account of issue of 2,00,000, 9% Debentures of ₹100 each at a discount of 10% redeemable @ 5% Premium. The amount to be charged to Statement of P&L for the year for Loss on issue of Debentures would be:
a) ₹30,00,000
b) ₹24,00,00o
c) ₹2,200,000
d) ₹20,00,000
15. Ankita Ltd. purchased building from Shagun Ltd. for ₹8,00,000. The consideration was paid by issue of 8% debentures of ₹100 each at a discount of 20%. The 8% Debentures account is credited with:
a) ₹10,00,000
b) ₹10,40,000
c) ₹9,60,000
d) ₹6,40,000
16. Which of the following statements is incorrect about debentures:
a) Debenture holders are the creditors of a company
b) Debentures can be issued to vendors at discount
c) Interest on debentures is an appropriation of profits
d) Interest is not paid on Debentures issued as Collateral Security
17. Assertion - Debentures saves income tax.
Reason - Interest on debenture is tax deductible expenditure.
a) Both Assertion and Reason are true, Reason is the correct explanation of Assertion
b) Assertion is correct but Reason is incorrect
c) Assertion is incorrect but Reason is correct
d) Both Assertion and Reason incorrect.
18. Assertion - Balance in debentures Interest Account is transferred to Statement of Profit & Loss at the end of the year
Reason - Interest on Debenture is charge against profit
a) Assertion is correct but Reason is incorrect
b) Assertion is incorrect but Reason is correct
c) Both Assertion and Reason are incorrect.
d) Both Assertion and Reason are correct, Reason is the correct explanation of Assertion
More questions will be added from time to time...
Class 12 Accountancy MCQs Debentures - Answers
- c) will not be entitled to interest on such debentures.
- b) ₹10,00,000
- c) 10,000
- c) loss on issue of debentures account
- d) all of the above
- c) Debentures cannot be converted into shares.
- b) ₹40,000
- a) ₹50,000
- c) Interest is not paid on Debentures issued as Collateral Security
- a) ₹10,00,000
- b) Capital Reserve is to be credited with ₹20,000
- d) ₹7,50,000
- b) 300 Debentures, ₹2,400
- b) ₹24,00,000
- a) ₹10,00,000
- c) Interest on debentures is an appropriation of profits
- a) Both Assertion and Reason are true, Reason is the correct explanation of Assertion
- d) Both Assertion and Reason are correct, Reason is the correct explanation of Assertion
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