CA Foundation Exam > CA Foundation Questions > Which of the following statement is false?a) ...
Start Learning for Free
Which of the following statement is false?
- a)A maturity, debenture holders get back their money as per the terms and conditions of redemption
- b)Debentures can be forfeited for non payment of call money
- c)In company’s balance sheet, debentures are shown under secured loans
- d)Interest on debentures is charged against profits
Correct answer is option 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Which of the following statement is false?a) ...
False Statement: Debentures can be forfeited for non-payment of call money.
Explanation:
Debentures are a type of loan taken by companies from public investors. The company promises to pay back the principal amount along with interest to the debenture holders on a specified date. Debentures are a long-term source of finance for the company.
Below are the true statements related to debentures:
A. At maturity, debenture holders get back their money as per the terms and conditions of redemption: Debenture holders invest their money for a specific period, and at the end of the maturity period, they get their money back along with the interest as per the terms and conditions mentioned in the debenture certificate.
B. Debentures can be forfeited for non-payment of call money: This statement is false. Call money is the money that the company asks the debenture holders to pay at the time of issuing the debentures. If the debenture holders fail to pay the call money, the company can cancel their allocation, but it cannot forfeit the entire debenture amount.
C. In the company's balance sheet, debentures are shown under secured loans: Debentures are long-term loans taken by the company from the public, and they are secured loans. Hence, they are shown under the secured loans section in the company's balance sheet.
D. Interest on debentures is charged against profits: Interest on debentures is an expense for the company, and it is charged against profits. The company needs to pay interest on debentures irrespective of whether it makes a profit or not.
Conclusion:
Hence, the false statement related to debentures is option B, which states that debentures can be forfeited for non-payment of call money.
Explanation:
Debentures are a type of loan taken by companies from public investors. The company promises to pay back the principal amount along with interest to the debenture holders on a specified date. Debentures are a long-term source of finance for the company.
Below are the true statements related to debentures:
A. At maturity, debenture holders get back their money as per the terms and conditions of redemption: Debenture holders invest their money for a specific period, and at the end of the maturity period, they get their money back along with the interest as per the terms and conditions mentioned in the debenture certificate.
B. Debentures can be forfeited for non-payment of call money: This statement is false. Call money is the money that the company asks the debenture holders to pay at the time of issuing the debentures. If the debenture holders fail to pay the call money, the company can cancel their allocation, but it cannot forfeit the entire debenture amount.
C. In the company's balance sheet, debentures are shown under secured loans: Debentures are long-term loans taken by the company from the public, and they are secured loans. Hence, they are shown under the secured loans section in the company's balance sheet.
D. Interest on debentures is charged against profits: Interest on debentures is an expense for the company, and it is charged against profits. The company needs to pay interest on debentures irrespective of whether it makes a profit or not.
Conclusion:
Hence, the false statement related to debentures is option B, which states that debentures can be forfeited for non-payment of call money.
Free Test
FREE
| Start Free Test |
Community Answer
Which of the following statement is false?a) ...
B
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. Can you explain this answer?
Question Description
Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. 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 Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. 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 Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. Can you explain this answer?.
Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. 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 Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. 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 Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. Can you explain this answer?.
Solutions for Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. Can you explain this answer?, a detailed solution for Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Which of the following statement is false?a) A maturity, debenture holders get back their money as per the terms and conditions of redemption b) Debentures can be forfeited for non payment of call money c) In company’s balance sheet, debentures are shown under secured loans d) Interest on debentures is charged against profits Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup