Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Issue and Redemption of Debentures NCERT Solutions | Describe the meaning of ‘Debenture
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.
More Questions From Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Issue and Redemption of Debentures
- Q:- What is meant by a Debenture?
- Q:-
State the meaning of ‘Debentures issued as a collateral security’.
- Q:-
What is ‘Capital Reserve’?
- Q:-
Describe the steps for creating Sinking Fund for redemption of debentures.
- Q:-
Can the company purchase its own debentures?
- Q:-
What is discount on issue of debentures?
- Q:-
What is meant by conversion of debentures? Describe the method of such a conversion.
- Q:-
Under which head is the ‘Debenture Redemption Reserve’ shown in the balance sheet?
- Q:-
Can a company purchase its own debentures in the open market? Explain.
- Q:-
What is meant by ‘Issue of debenture at discount and redeemable at premium?
Popular Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
- Q:-
What do you mean by Ratio Analysis?
- Q:-
List the techniques of Financial Statement Analysis.
- Q:-
State the meaning of financial statement analysis?
- Q:-
What are various types of ratios?
- Q:-
Distinguish between Vertical and Horizontal Analysis of financial data.
- Q:-
What are limitations of financial statement analysis?
- Q:-
What relationships will be established to study?
(a) Inventory Turnover (b) Debtor Turnover
(c) Payables Turnover (d) Working Capital Turnover - Q:-
State the meaning of Analysis and Interpretation.
- Q:-
List any three objectives of analysing financial statements?
- Q:-
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?
Recently Viewed Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
- Q:-
Explain how common size statements are prepared giving an example.
- Q:-
‘Financial statements reflect a combination of recorded facts, accounting
conventions and personal judgements’ discuss. - Q:-
Explain the limitations of financial statements.
- Q:-
Explain the nature of the financial statements.
- Q:-
What do you mean by Common Size Statements?
- Q:-
State the importance of Financial Analysis?
- Q:-
What are Comparative Financial Statements?
- Q:-
Prepare the format of balance sheet and explain the various elements of balance sheet.
- Q:-
What are various types of ratios?
- Q:-
What are important profitability ratios? How are these worked out?
- All Chapters Of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
- All Subjects Of Class 12