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Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - B Com MCQ


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10 Questions MCQ Test Advanced Corporate Accounting - Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2

Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 for B Com 2024 is part of Advanced Corporate Accounting preparation. The Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 questions and answers have been prepared according to the B Com exam syllabus.The Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 below.
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Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 1

What is a debenture?

Detailed Solution for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 1
A debenture is a unit of loan amount issued by a company when it intends to raise funds from the public. It represents a debt obligation that the company owes to the debenture holders.
Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 2

Which type of debentures have a claim on the assets charged with the highest priority?

Detailed Solution for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 2
First mortgage debentures have the highest priority claim on the assets charged by the company. These debenture holders will be paid back their principal and interest before any other debenture holders.
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Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 3

What are non-redeemable debentures?

Detailed Solution for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 3
Non-redeemable debentures are those that are not redeemed during the lifetime of the company. They are repaid only when the company goes into liquidation.
Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 4
What is the main difference between registered debentures and bearer debentures?
Detailed Solution for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 4
Registered debentures are recorded in the company's register, and ownership transfer requires proper documentation. Bearer debentures, on the other hand, can be transferred by simple delivery, making them more convenient for trading.
Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 5
What are convertible debentures?
Detailed Solution for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 5
Convertible debentures are those that can be converted into shares of the company after a predetermined period. The terms and conditions of conversion are usually specified at the time of issuing the debentures.
Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 6
Which type of debentures are redeemed before any other debentures?
Detailed Solution for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 6
First debentures are redeemed before any other debentures. They have the highest priority in redemption.
Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 7

What is the difference between debentures issued at par and debentures issued at premium?

Detailed Solution for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 7

Debentures issued at par are issued at their nominal value, meaning they are sold at the same value as their face value. On the other hand, debentures issued at a premium are sold at a value higher than their nominal value, reflecting the investor's willingness to pay more than the face value due to factors such as higher demand or perceived lower risk.

Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 8
What is the primary purpose of issuing debentures for consideration other than cash?
Detailed Solution for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 8
Issuing debentures for consideration other than cash allows the company to acquire assets without utilizing its cash reserves, thereby facilitating business expansion.
Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 9
Under what circumstance are debentures issued at a discount?
Detailed Solution for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 9
Debentures are issued at a discount when they are issued at a value lower than their nominal value, often as a part of the consideration for purchasing assets.
Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 10
What happens to the premium received on issuing debentures?
Detailed Solution for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 2 - Question 10
The premium received on issuing debentures is credited to the Securities Premium A/c as per the Companies Act, 1956. This account reflects the excess amount paid by investors over the nominal value of the debentures.
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