Accounting for Debentures Test

Result

Accounting for Debentures Test - 6

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

When a company issue its debentures at discount, the amount of discount is considered as a:

A
Revenue Expense

B
Normal Loss

C
Capital gain

D
Capital loss

Solution

Discount allowed by company at the time of issue debentures is treated as capital loss and should be written off against the Statement of Profit and loss or against the Securities premium reserve.
Question 2
1 / -0

The amount of discount which is unamortized or cannot be written off , is shown in the balance sheet under the ----------

A
Reserve and Surplus

B
Other Non-current Assets

C
Other Non-current Liabilities

D
Short term provisions

Solution

The amount of discount which is unamortized or not written off yet is shown in the balance sheet under the heading Non-current Assets and sub heading other non-current assets.
Question 3
1 / -0

Vinod Limited issued 1,000, 13% debentures of Rs.100 each at a premium of 10%. Applications were received for 950 debentures only. All applications were accepted and debentures were allotted. What amount is to be credited to the Securities Premium Account?

A
10,000

B
1,000

C
9,500

D
1,950

Solution

Securities premium account is to be credited with Rs.9,500 i.e. Applications received 950 x 10 Rate of premium = 9,500
Question 4
1 / -0

Vinod Limited issued 1,000, 13% debentures of Rs.100 each at a premium of 10%. Applications were received for 1500 debentures and pro-rata allotment was made to all the applicants. All applications were accepted and debentures were allotted. What amount is to be refunded to the applicants?

A
No Refund

B
50,000

C
55,000

D
5,000

Solution

Rs.55,000 is to be refunded to the applicants i.e. 500 Excess applications x 110 = 55,000.
Question 5
1 / -0

Which of the following is not a regular method of redemption of debentures?

A
Redemption by selling business

B
Redemption by paying Lump Sum amount

C
Redemption by converting debentures into shares

D
Redemption by purchasing own debentures from the open market

Solution

Methods of Redemption are:
Redemption by paying Lump Sum amount
Redemption by Draw of Lots
Redemption by purchasing own debentures from the open market
Redemption by converting debentures into shares
Question 6
1 / -0

Vinod Limited has to redeem its debentures worth Rs.60,000 by paying a lump sum amount to the debenture holders. How much DRR company should create?

A
60,000

B
15,000

C
30,000

D
No DRR is required

Solution

As per the Section 71 (4) of the Companies Act, 2013 and Rule 18 (7) of the companies Rules 2014 company must create 25% DRR. i.e. 15,000.
Question 7
1 / -0

Vinod Limited has to redeem its debentures worth Rs.80,000 by paying a lump sum amount to the debenture holders. There is balance available in the DRR ₹9,000. How much DRR company must create to fulfil as per the Rule?

A
11,000

B
9,000

C
No DRR is required

D
20,000

Solution

As per the rule company must create a DRR Equal to 25% of the amount i.e. 20,000
A balance of DRR is already available for ₹9,000; Now company must create DRR for the remaining amount i.e. 11,000.
Question 8
1 / -0

Vinod Limited has to redeem its debentures worth ₹1,00,000 by paying a lump sum amount to the debenture holders. There is balance available in the DRR ₹14,000. How much DRR company must create if the redemption is made purely out of the profits?

A
20,000

B
6,000

C
1,00,000

D
86,000

Solution

When a company redeemed its shares purely out of profit in such a case we make 100% DRR. In this case DRR should be Rs.1,00,000 but ₹14,000 balance of DRR is already available. So DRR will be created only for the remaining amount i.e. 86,000
Question 9
1 / -0

Maximum discount limit on issue of debentures is

A
15%

B
10%

C
20%

D
Not Fixed

Solution

There is no limit fixed by the Companies Act, 2013 for the maximum discount.
Question 10
1 / -0

When a company issue some debentures for a longer period with the charge of some assets they are called ________

A
Un-registered Debentures

B
Are not treated as Debentures

C
Unsecured Debentures

D
Secured Debentures

Solution

When a company issue some debentures with the charge of some assets they are called secured debentures. Such debentures are shown in the balance sheet under the heading of Long Term Borrwoings.

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Accounting for Debentures Test - 6

Result

Accounting for Debentures Test - 6

Score

-

Rank

-

SHARING IS CARING

Question 1

Revenue Expense

Normal Loss

Capital gain

Capital loss

Solution

Question 2

Reserve and Surplus

Other Non-current Assets

Other Non-current Liabilities

Short term provisions

Solution

Question 3

10,000

1,000

9,500

1,950

Solution

Question 4

No Refund

50,000

55,000

5,000

Solution

Question 5

Redemption by selling business

Redemption by paying Lump Sum amount

Redemption by converting debentures into shares

Redemption by purchasing own debentures from the open market

Solution

Question 6

60,000

15,000

30,000

No DRR is required

Solution

Question 7

11,000

9,000

No DRR is required

20,000

Solution

Question 8

20,000

6,000

1,00,000

86,000

Solution

Question 9

15%

10%

20%

Not Fixed

Solution

Question 10

Un-registered Debentures

Are not treated as Debentures

Unsecured Debentures

Secured Debentures

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.