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This a MCQ (Multiple Choice Question) based practice test of Chapter 7 - Company Accounts Issue of Debentures of Accountancy of Class XII (12) for the quick revision/preparation of School Board examinations
Q Debenture Application Account is:
- a)Interest
- b)Nominal Account
- c)Real Account
- d)None of these
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
This a MCQ (Multiple Choice Question) based practice test of Chapter 7...
Explanation:
Debenture Application Account is a Real Account. Let's understand why:
Real Account:
Real Account is a type of account in which we record transactions related to assets and liabilities. These transactions are related to tangible and intangible things that exist in the real world. The transactions recorded in Real Account are those that affect the balance sheet of the company.
Debenture Application Account:
Debenture Application Account is a Real Account because it is related to the application of debentures, which are a liability of the company. When a company issues debentures, it receives applications from the public to subscribe to these debentures. The amount received from these applications is recorded in the Debenture Application Account, which is a liability account.
Importance of Debenture Application Account:
The importance of Debenture Application Account lies in the fact that it helps in determining the amount of subscribed and unsubscribed debentures. This information is useful in determining the success of the debenture issue and in making decisions for future issues.
Conclusion:
In conclusion, Debenture Application Account is a Real Account as it is related to the application of debentures, which are a liability of the company. Understanding this concept is important for the students of Accountancy as it forms the basis of recording transactions related to debentures.
Debenture Application Account is a Real Account. Let's understand why:
Real Account:
Real Account is a type of account in which we record transactions related to assets and liabilities. These transactions are related to tangible and intangible things that exist in the real world. The transactions recorded in Real Account are those that affect the balance sheet of the company.
Debenture Application Account:
Debenture Application Account is a Real Account because it is related to the application of debentures, which are a liability of the company. When a company issues debentures, it receives applications from the public to subscribe to these debentures. The amount received from these applications is recorded in the Debenture Application Account, which is a liability account.
Importance of Debenture Application Account:
The importance of Debenture Application Account lies in the fact that it helps in determining the amount of subscribed and unsubscribed debentures. This information is useful in determining the success of the debenture issue and in making decisions for future issues.
Conclusion:
In conclusion, Debenture Application Account is a Real Account as it is related to the application of debentures, which are a liability of the company. Understanding this concept is important for the students of Accountancy as it forms the basis of recording transactions related to debentures.
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This a MCQ (Multiple Choice Question) based practice test of Chapter 7...
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This a MCQ (Multiple Choice Question) based practice test of Chapter 7- Company Accounts Issue of Debentures of Accountancy of Class XII (12) for the quick revision/preparation of School Board examinationsQ Debenture Application Account is:a)Interestb)Nominal Accountc)Real Accountd)None of theseCorrect answer is option 'C'. Can you explain this answer?
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