1 View

Question : Which of the following statements is not true?

Option 1: Interest on debentures is a charge against a profit of the company and is payable whether the company earns a profit or incurs a loss.

Option 2: Interest on debentures is calculated at a fixed rate of interest on the nominal (face) value.

Option 3: Interest is payable on debentures issued as collateral security.

Option 4: Balance in Debentures' Interest Account is transferred to Statement of Profit and Loss (Finance Cost) at the end of the year.


Team Careers360 18th Jan, 2024
Answer (1)
Team Careers360 20th Jan, 2024

Correct Answer: Interest is payable on debentures issued as collateral security.


Solution : Answer = Interest is payable on debentures issued as collateral security.

The security given in addition to the primary or principal security is termed or known as Collateral Security. Collateral security is realised by the lender only if the due amount (loan plus interest) cannot be recovered by realising the primary or principal security. Interest is not payable on debentures issued as collateral security.

Related Questions

CLAT Current Affairs with GK ...
Apply
Stay updated with current affairs & check your preparation with the CLAT General Knowledge Mock Tests Ebook
CLAT English Language Mock Tests
Apply
Free Ebook - CLAT 2025 English Language questions with detailed solutions
ICFAI Business School-IBSAT 2024
Apply
9 IBS Campuses | Scholarships Worth Rs 10 CR
CLAT Legal Reasoning Mock Tests
Apply
Free Ebook - CLAT 2025 legal reasoning questions with detailed solutions
GIBS Business School Bangalor...
Apply
100% Placements with 220+ Companies
Great Lakes PGPM & PGDM 2025
Apply
Admissions Open | Globally Recognized by AACSB (US) & AMBA (UK) | 17.3 LPA Avg. CTC for PGPM 2024
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books