Sources of Business Finance Test

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Sources of Business Finance Test - 20

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Weekly Quiz Competition

Question 1
1 / -0

Sinking fund A/c is created for which of these purpose

A
to repay or redeem a long - term fixed liability

B
to replace a wasting asset

C
to replace a depreciable asset

D
all the three
Question 2
1 / -0

In question No.56 if the company cancels the debentures purchased on 31.03.09 what entry would be passed for cancellation of debentures when they were purchased ex-interest

A
10% Debenture A/c Dr Rs.20,000, Cr Own Debenture A/c Rs.18,700, Profit on cancellation of own Debenture A/c Rs.1300

B
10% Debenture A/c Dr Rs.20,000, Cr Own Debenture A/c Rs.20,000

C
10% Debenture A/c Dr Rs. 20,000, Cr Rs.19000,Profit on cancellation of own Debenture A/c rs.1000

D
0% Debenture A/c Dr Rs.20,000, Cr own Debenture A/c Rs.19,200, Profit on cancellation of own Debenture A/c Rs.800
Question 3
1 / -0

Interest accrued and due on Debentures is shown under...

A
Provisions

B
Unsecured loans

C
Secured loans

D
Current liabilities
Question 4
1 / -0

Premium on redemption of debenture account is a ______

A
Real A/c

B
Nominal A/c

C
Personal A/c

D
Dummy A/c

Solution

Premium on redemption of debentures is shown under liabilities side of the Balance Sheet, so, it is a personal account. This premium is payable by the company on redemption of the debentures to the debenture-holders.
Therefore, C is the correct option.
Question 5
1 / -0

Convertible debentures can be converted into

A
Cash

B
Bank overdraft

C
Shares

D
goods
Question 6
1 / -0

The term synonymous with 'Debenture' is ___________.

A
Capital

B
Bonds

C
Loan

D
Reserve
Question 7
1 / -0

A company issued $$14\%$$ debentures of Rs. $$1,000$$ each at Rs. $$950$$ to be redeemable at Rs. $$1,050$$. The difference of Rs. $$100$$ will be ____________.

A
debited to loss on issue of debenture a/c

B
credited to loss on issue of debenture a/c

C
preliminary expenses a/c

D
capital loss a/c
Question 8
1 / -0

Debenture cannot be issued......

A
at premium

B
redeemable at premium

C
at par

D
redeemable at discount
Question 9
1 / -0

Asina Development Bank was set up in ________.

A
1960

B
1966

C
1970

D
1963
Question 10
1 / -0

Which of the following is not a type of debentures?

A
Secured

B
Current

C
Bearer

D
Redeemable

Solution

Secured Debentures - When the debentures are secured against assets of the concerned company, these are called secured or mortgage debenture.

Redeemable Debentures - If the debenture’s issuing authorities are legally mandated to redeem the debenture certificate on a particular date and pay the return to the investors, then those are called redeemable debentures.

Bearer Debentures - Bearer debentures don’t carry any registration with any specific investor’s details. With a mere delivery process, the debentures are transferred to any new holders.
Hence, option (b) is correct.

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Sources of Business Finance Test - 20

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Sources of Business Finance Test - 20

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Question 1

to repay or redeem a long - term fixed liability

to replace a wasting asset

to replace a depreciable asset

all the three

Question 2

10% Debenture A/c Dr Rs.20,000, Cr Own Debenture A/c Rs.18,700, Profit on cancellation of own Debenture A/c Rs.1300

10% Debenture A/c Dr Rs.20,000, Cr Own Debenture A/c Rs.20,000

10% Debenture A/c Dr Rs. 20,000, Cr Rs.19000,Profit on cancellation of own Debenture A/c rs.1000

0% Debenture A/c Dr Rs.20,000, Cr own Debenture A/c Rs.19,200, Profit on cancellation of own Debenture A/c Rs.800

Question 3

Provisions

Unsecured loans

Secured loans

Current liabilities

Question 4

Real A/c

Nominal A/c

Personal A/c

Dummy A/c

Solution

Question 5

Cash

Bank overdraft

Shares

goods

Question 6

Capital

Bonds

Loan

Reserve

Question 7

debited to loss on issue of debenture a/c

credited to loss on issue of debenture a/c

preliminary expenses a/c

capital loss a/c

Question 8

at premium

redeemable at premium

at par

redeemable at discount

Question 9

1960

1966

1970

1963

Question 10

Secured

Current

Bearer

Redeemable

Solution

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