Describe the meaning of ‘Debenture Issued as Collateral Securities’. What accounting treatment is given to the issue of debentures in the books of accounts?
Debentures issued as collateral security is secondary or parallel security for the original loan taken by the company. The lender can realize the collateral security in case borrower fails to make the payment of the original loan. In this article, we will learn more about the debentures issued as collateral security and accounting treatment.
Debentures issued as Collateral Security
Collateral means secondary. Thus, collateral security refers to supporting or secondary security for a loan. In case the borrower fails to pay the original loan amount on the due date, the lender can sell the collateral security to realize the amount of loan.
Usually, the borrower places a particular asset or a group of assets as collateral security. When he fails to pay the loan, these assets are sold and the loan is paid from the sale proceeds.
State the meaning of ‘Debentures issued as a collateral security’.
What is ‘Capital Reserve’?
Can the company purchase its own debentures?
Describe the steps for creating Sinking Fund for redemption of debentures.
What is discount on issue of debentures?
Under which head is the ‘Debenture Redemption Reserve’ shown in the balance sheet?
What is meant by conversion of debentures? Describe the method of such a conversion.
Can a company purchase its own debentures in the open market? Explain.
Explain the different types of debentures?
What do you mean by Ratio Analysis?
List the techniques of Financial Statement Analysis.
State the meaning of financial statement analysis?
What are various types of ratios?
Distinguish between Vertical and Horizontal Analysis of financial data.
What are limitations of financial statement analysis?
What relationships will be established to study?
(a) Inventory Turnover (b) Debtor Turnover
(c) Payables Turnover (d) Working Capital Turnover
State the meaning of Analysis and Interpretation.
List any three objectives of analysing financial statements?
The liquidity of a business firm is measured by its ability to satisfy itslong-
term obligations as they become due. What are the ratios used forthis purpose?
Prepare the format of balance sheet and explain the various elements of balance sheet.
The liquidity of a business firm is measured by its ability to satisfy itslong-
term obligations as they become due. What are the ratios used forthis purpose?
Explain how common size statements are prepared giving an example.
Explain the nature of the financial statements.
Explain in detail about the significance of the financial statements.
What are important profitability ratios? How are these worked out?
How will you disclose the following items in the Balance Sheet of a company;
(i) Loose tools
(ii) Uncalled liability on partly paid-up shares
(iii) Debentures redemption reserve
(iv) Mastheads and publishing titles (v) 10% debentures
(vi) Proposed dividend
(vii) Share forfeited account
(viii) Capital redemtion reserve
(ix) Mining rights
(x) Work-in-progress
What is the importance of comparative statements? Illustrate youranswer with particular reference to comparative income statement.
What do you mean by Common Size Statements?
The average age of inventory is viewed as the average length of time inventory is held by the firm or as the average number of days’ sales in inventory. Why?