A debenture is a: MCQ with Answer and Explanation

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A debenture is a:

A. Document of ownership

B. Short-term asset

C. Form of preference share

D. Instrument acknowledging a debt

Answer: Option D

Solution (By JKSSB Mock Tests)

A debenture is a written instrument issued under the common seal of the company acknowledging a long-term debt to the holders.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

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AS 5 (Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies) requires that extraordinary items should be:

A. Clubbed with regular income

B. Shown as appropriation

C. Not disclosed

D. Disclosed separately in the profit and loss statement

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Correct Answer: Option D

Explanation:
Extraordinary items are disclosed separately to show their nature and amount.

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Question #2

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Consider these journal entries: 1. Drawings A/c Dr., To Purchases A/c 2. Machinery A/c Dr., To Cash A/c 3. Rent A/c Dr., To Outstanding Rent A/c 4. Bank A/c Dr., To Interest Received A/c. Which combination represents a compound journal entry?

A. 1 and 2

B. All are simple entries

C. 2 and 3

D. 2 and 4

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Correct Answer: Option B

Explanation:
All given entries involve only two accounts, hence are simple journal entries.

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Question #3

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Which of the following is a 'Money Bill' in India?

A. Bill on education

B. Bill on labor reforms

C. Bill for amendment of Companies Act

D. Finance Bill dealing with taxes

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Correct Answer: Option D

Explanation:
Finance Bill is a Money Bill as it deals with taxation and government expenditure.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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