Company Accounts

Debentures

Easy

common

Match List-I with List-II

List-I List-II
(Type of Debentures) (Characteristic of Debenture)
(A) Secured Debentures (I) do not have a specific charge on assets of the company
(B) Redeemable Debentures (II) do not carry a specific rate of interest
(C) Zero Coupon Rate Debentures (III) are payable on the expiry of the specific period
(D) Unsecured Debentures (IV) a charge is created on the assets of the company

Choose the correct answer from the options given below:

List-I	List-II
(Type of Debentures)	(Characteristic of Debenture)
(A) Secured Debentures	(I) do not have a specific charge on assets of the company
(B) Redeemable Debentures	(II) do not carry a specific rate of interest
(C) Zero Coupon Rate Debentures	(III) are payable on the expiry of the specific period
(D) Unsecured Debentures	(IV) a charge is created on the assets of the company

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (IV), (B) - (III), (C) - (II), (D) - (I)

(A) - (IV), (B) - (II), (C) - (III), (D) - (I)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

✅ Correct Option: 2

(A) Secured Debentures are backed by a specific charge on the assets of the company. If the company defaults, debenture holders can recover their dues by selling these assets. This matches with (IV).

(B) Redeemable Debentures have a fixed maturity period and are repaid on expiry of that specific period. These are the most common type of debentures. This matches with (III).

(C) Zero Coupon Rate Debentures are issued at a discount to their face value and do not carry any periodic interest payment. The return to investors comes from the difference between issue price and redemption value. This matches with (II).

(D) Unsecured Debentures (also called naked debentures) are not backed by any specific charge on the company's assets. They rely solely on the general creditworthiness of the company. This matches with (I).

Correct matching:

(A) → (IV)
(B) → (III)
(C) → (II)
(D) → (I)

Option 2 is correct.

2026: 24 May Shift 1

Gaurav Ltd issued 600, 8% debentures of Rs. 100 each as collateral security against a Bank loan of Rs. 50,000. Journal Entry for issue of debentures as collateral security will be:

2025: 3 June Shift 1

Which among the following debentures are the debentures which can be transferred by way of delivery and the company does not keep any record of the debentures. Interest on the debentures is paid to a person who produces this interest coupon attached to such debentures?

2025: 13 May Shift 1

Which statements are wrong about debentures?

(A) Debenture is a part of owned capital.

(B) The debentures cannot be issued at a discount of more than 10% of the face value.

(D) Redeemable debentures are those debentures, which are payable on the expiry of the specific period.

Choose the correct answer from the options given below:

2025: 24 May Shift 1

Which of the following statements about debentures is FALSE?

(A) Debenture is a part of owned capital.

(B) Debentures cannot be converted into shares.

(D) Debentures cannot be issued at a premium.

Choose the correct answer from the options given below:

2026: 29 May Shift 1

X Ltd. purchased an asset of book value of Rs. 4,00,000 and took over the liability of Rs. 50,000 from Y Ltd. It was agreed that the purchase consideration, settled at Rs. 3,80,000, will be paid by issuing debentures of Rs. 100 each at a discount of 10 % . How many debentures will be issued by X Ltd. to Y Ltd.?

2025: 26 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Debenture of Rs 100 issued at Rs 110.	(I) Debenture as collateral security.
(B) Debenture of Rs 100 issued at Rs 100.	(II) Debenture issued at Premium
(C) Debenture of Rs 100 issued at Rs 90.	(III) Debenture issued at par.
(D) Debenture issued to the lender in addition to some other assets already pledged.	(IV) Debenture issued at Discount.

Choose the correct answer from the options given below:

Solution

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