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Direction: Choose the correct answer to the following questions from the given alternatives:
Debenture represents the:
- a)Long-term liabilities of a business
- b)Govt’s share in the capital of the company
- c)Short-term liabilities
- d)Investment by shareholders in business
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Direction:Choose the correct answer to the following questions from th...
Debenture represents the:
- Long-term liabilities of a business: Debentures represent long-term liabilities of a business. They are essentially a form of loan taken by the company from investors, usually with a fixed rate of interest.
- Govt's share in the capital of the company: This statement is incorrect. Debentures do not represent government shares in the capital of a company.
- Short-term liabilities: Debentures are not short-term liabilities. They are typically issued for a longer duration, usually more than one year.
- Investment by shareholders in business: Debentures are not investments by shareholders. Shareholders invest in the company by buying shares, while debenture holders lend money to the company.
Therefore, the correct answer is A: Long-term liabilities of a business.
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Direction:Choose the correct answer to the following questions from th...
Debenture represents the Long-term liabilities of a business:
Debentures are a type of long-term debt instrument issued by a company to raise funds from the public or institutional investors. They represent a promise to repay the principal amount along with interest at a specified future date. Here's why debentures represent the long-term liabilities of a business:
1. Nature of Debentures:
Debentures are typically issued for a longer duration, usually ranging from 3 years to 30 years. This makes them a form of long-term borrowing for the company.
2. Fixed Maturity Date:
Debentures have a fixed maturity date, which means the company is obligated to repay the principal amount on that date. This reflects a long-term commitment to repay the debt.
3. Interest Payments:
Companies pay periodic interest on debentures, which is a fixed amount agreed upon at the time of issuance. This interest payment obligation extends over the entire term of the debenture, indicating a long-term liability.
4. Ranking in Capital Structure:
Debentures are considered as part of the company's long-term capital structure and are ranked above equity shares in terms of repayment priority in case of bankruptcy or liquidation.
In conclusion, debentures represent the long-term liabilities of a business due to their nature, fixed maturity date, interest payment obligations, and ranking in the company's capital structure. They play a crucial role in providing companies with long-term financing options while also reflecting their long-term financial commitments.
Debentures are a type of long-term debt instrument issued by a company to raise funds from the public or institutional investors. They represent a promise to repay the principal amount along with interest at a specified future date. Here's why debentures represent the long-term liabilities of a business:
1. Nature of Debentures:
Debentures are typically issued for a longer duration, usually ranging from 3 years to 30 years. This makes them a form of long-term borrowing for the company.
2. Fixed Maturity Date:
Debentures have a fixed maturity date, which means the company is obligated to repay the principal amount on that date. This reflects a long-term commitment to repay the debt.
3. Interest Payments:
Companies pay periodic interest on debentures, which is a fixed amount agreed upon at the time of issuance. This interest payment obligation extends over the entire term of the debenture, indicating a long-term liability.
4. Ranking in Capital Structure:
Debentures are considered as part of the company's long-term capital structure and are ranked above equity shares in terms of repayment priority in case of bankruptcy or liquidation.
In conclusion, debentures represent the long-term liabilities of a business due to their nature, fixed maturity date, interest payment obligations, and ranking in the company's capital structure. They play a crucial role in providing companies with long-term financing options while also reflecting their long-term financial commitments.
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Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer?
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Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer?.
Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer?.
Solutions for Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of Direction:Choose the correct answer to the following questions from the given alternatives:Debenture represents the:a)Long-term liabilities of a businessb)Govt’s share in the capital of the companyc)Short-term liabilitiesd)Investment by shareholders in businessCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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