After the redemption of all debentures, the balance in sinking fund is transferred to A. Sf investment a/c B. … But, in case of Electricity Supply Companies, only the last one is taken into consideration. The balance of Receipts and Expenditure on Capital Account is carried down and shown in the respective side of the General Balance Sheet, or, the total of two sides of this account are shown ort both sides of the General Balance Sheet. All items of expenditure appear on the debit side whereas all items of income appear on the credit side of Revenue Account. There are 15 questions in this test with each question having around four answer choices. The following are the balances in the books of Bijli (P) Ltd. as on 31.12.2009: The following is the Trail Balance of South Bengal Electric Co. Ltd. as on 31st March 2006: 1. Full amount is payable on application, Pass journal entries. 100 each; (b) Bank Loan of Rs. As a A company is said to be Deemed Public Company … The company issues convertible debentures to attract enough investors to fund their international expansion. H�\��n�@ཟb��"2x�O�R �Ģ?*�{H-cg��w���TE2s����+�-w��}׎��>\�Cé�! General reserve a/c C. Capital reserve a/c D. Redemption reserve a/c 41. . Expenses on Issue of Debentures Account 3. (ii) Issue of Debentures at Discount : When debentures are issued by company at a price less than its nominal value (face value) it is said to be issued at discount. 5. Question 6: A company has an opening credit balance in Surplus, i.e., Balance in Statement of Profit and Loss of 1,00,000.During the year, it earned a profit of 75,000. Read this article to learn about the preparation of final accounts under Electricity Supply Act, 1910, i.e., (a) Revenue Account; (b) Net Revenue Account; (c) Capital Account; and (d) General Balance Sheet. Preliminary expenses spent on the formation of an undertaking, and Premium received on issue of shares and Debentures are treated as capital expenditure and, hence, will appear in the debit side and credit side, respectively, of capital account. 5 per share was payable on 30th June 2009. They are debentures without the convertibility feature attached to them. endstream endobj 200 0 obj <>>> endobj 201 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/TrimBox[0.0 0.0 595.276 841.89]/Type/Page>> endobj 202 0 obj <>stream The following is the Trail Balance of the Social Electric Lighting Co. Ltd. for the year ended Dec. 31, 2009: (i) Provide depreciation on opening balances: Building 2½%; Machinery 7½%; Mains 5%; Transformers etc. 10,00,000 repayable after 5 years; (c) Interest on debentures is yet to be paid. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. On the other hand, the right hand side (or credit side) reveals the receipts on capital account including amount received from public for shares and debentures including the amount of fixed loans, if any. k(�����*k���ү�+� �ү�+� Depreciation: Land & Building 2½% p.a, Generation Plant (on addition 1/2 year) 10% p.a. The company Premium received on shares and debentures or any calls paid in advance are also to be added and Calls-in-arrear is to be deducted. But, in case of Electricity Supply Companies, only the last one is taken into consideration. 1, 00,000. 20,00,000 at a discount of 10% on April 01,2004 and the company pays interest half-yearly on June 30 and December 31 every year. debentures of the company. Debentures in accounting represent the medium to long term instrument of debt that the large companies use to borrow money. �#�6 i���.����G�+zM���zG�4����N�#�I9�ehڼ��9�7��s��0�6��ס1�벮p],r�Ф.˼�@Q�j��s����6R| qg����i~���� Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Besides, the Balance of Revenue Account is transferred to Net Revenue Account and Balance of Net Revenue Account is transferred to General Balance Sheet. 4����0���\z~ѽuyh��y�������ϫq=)�ՠj����b: M�ơ=U��%M?M?4-�s�������8T�pN�0_��l� +% �y3 199 0 obj <> endobj Prepare Revenue Account, Net Revenue Account, Capital Account for the year ended 31.3.06 and a General Balance Sheet on the date. 10%, Meters and Electrical Instruments 15%, Advertising has been prepaid by Rs. N.B. on changes to the rights attached to the debentures. These debentures are redeemable by annual drawings of Rs,1,00,000 made on December 31 each year. Shown in the Equity and Liability part of the Balance Sheet under the head ‘Shareholders’ fund and sub-head ‘Reserves and Surplus’. A company has an opening credit balance in Surplus, i.e., Balance in Statement of Profit and Loss of 1,00,000. h�̖ao�8�����8v�B�n)��P�Ж�U(�����&K���_�;�nE{�j���d9v����d�$*QB Under which heads and sub-heads the following items will appear in the Balance Sheet of a company as per revised Schedule VI, Part-I of the Companies Act 1956. i. X holding 500 shares paid only application and allotment money whereas Y holding 400 shares did not pay final call. Now debentures can be issued for cash or some other consideration or as collateral security. PDF … Debentures will be redeemed at a discount when the company is able to buy the debentures in the open market at a price lower than the face value of the debentures. 50,000 and Mains Rs. �ү�+� 4, 00,000 and Debentures issued Rs. Before redemption starts, there must be a balance of at least 50 In short; It corresponds with the ordinary Profit and Loss Appropriation Account of a trading concern prepared under Single Account System. 2, 00,000. While, preparing statement of profit and loss the revenue is included in the sales of the year in which the sale was undertaken even though the sale price may be received %PDF-1.5 %���� Debenture holders have no rights to vote in the company’s general meetings of shareholders, but they may have separate meetings or votes e.g. The accounting treatment of the two is also quite similar. Meaning of Issue of Debentures 2. Here to the money can be collected lump sum or in installments. It corresponds with the ordinary Profit and Loss Account (prepared under Single Account System) where the expenses are grouped under appropriate headings. Contents: Meaning of Issue of Debentures Expenses on Issue of Debentures Account Debenture Redemption Reserve Issue of Debentures as […] But, under Double Account System, it is a charge against appropriation of profit and, hence, debited to Net Revenue Account. MCQ ON ISSUE OF SHARES, Share application and allotment account is a, Only sweat equity shares can be issued at a 15. Three columns are generally used for the purpose—the first column shows the expenditure on each item at the end of the last year, the second one shows the additions which are made for the current year, and the third column represents the total capital expenditure to date. Following amounts were payable on issue of shares by a Company : 3 on application, 3 on allotment 2 on first call and 2 on final call. The directors 220 0 obj <>stream PDF Download was Prepared Based on Latest Exam Pattern. �.�� ɀ�� T�3a�$�EŸ��4K��hL�,��3�30�09p*1V���q��B#?��oAJ�x��0�a`M`e�O`�̰���D���Lb�� �v �� ` ���� %%EOF Collateral Security 5. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 10 Financial Statements of Companies. On March 31, 2006, the amount shown as “interest In case of debentures they are not secured by providing a collateral or Certain other items, e.g. 5 premium, the amount which should be debited to loss on redemption of debenture a/c is ____. 50,000; Transformers Rs. Plagiarism Prevention 4. Debenture premium cannot be It … �ү�+� any kind of reserve, say, General Reserve, Capital Reserve etc., or any kind of funds, e.g. 10%, and Meters 15%. Three columns are also used the first column shows the receipts on each item at the end of last year, the second column shows the receipts for the current year, and the third column represents the total capital receipts to date. Mains (including addition) Rs. Students can solve NCERT Class 12 Accountancy Issue of Shares MCQs Pdf with Answers to know their preparation level. Beta Ltd issued 5,000, 9% debentures of Rs.500 each. Real account C. Nominal account D. Impersonal account 2. Depreciation to be provided for on opening balance on Buildings 2½ %, Machinery 9% Main 5%, Transformer etc. (ii) A Call of Rs. of Shares Cost Market Value A Ltd. 5,000 2,50,000 3,00,000 X Ltd. 1,000 80,000 1,00,000 Z (a) 25,000, 10% debentures of Rs. Delhi Computers Company issued 3000, 10% Debentures of Rs. 6X The term debenture is used interchangeably with terms bond, note, or loan stock. A company issued debentures of the face value of Rs,5,00,000 at a discount of 6% on January 01, 2001. Copyright 10. A. personal account B. Interest on Loan and Interest on debentures are shown on the debit side of the Net Revenue Account, i.e. 1 per share was payable on 30.6.2009 and arrears are subject to interest at 10% p.a. 95 and it is redeemable at rs. Let us study this in detail It decided to transfer 15,000 to Debentures Redemption Reserve Prepare Revenue Account, Receipts and Expenditure on Capital Accounts for the year ended 31st Dec. 2009 and a Balance Sheet as on that date. Before publishing your articles on this site, please read the following pages: 1. ���(g��|o�h�w [1s]�-|[��ϱE�˘����N�b�@��� \1�O/~R�-ۢf����xîI|X�)��ڳ=,���&�T"���xg�� �� This is Accountancy class 12 Company Accounts Issue of Debentures CBSE Questions & Answers. Prohibited Content 3. �ү�+� it is prepared in its usual form. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. Proposed Dividend 20% of closing balance of shares capital. The issue of Debentures is very similar to the issue of shares by a company. Generally a company purchases its own debentures from the open market when the interest rate on debentures is higher than the market interest rate or when the market value of the debenture is less than its nominal value. 3. Depreciation Fund, etc., also will appear in the Balance Sheet. B.Com III Semester Company Accounts Multiple Choice Questions. 1. 211 0 obj <>/Filter/FlateDecode/ID[<1DFEA016318A21468A467DDD56E13A8B>]/Index[199 22]/Info 198 0 R/Length 71/Prev 1345455/Root 200 0 R/Size 221/Type/XRef/W[1 2 1]>>stream "ګX�Q����Iͭ�C�]:������$��+��/k�TyXDt�u����q)9�Xn�(+��~�vnAY�Ǘ 8���r%€Ma�f���y�b |���"R;�g��YOvn՜��;}x�P�)t[ ��m݇['�ݼ,Tj��%k�=�>�0I5:i���LJ���}�X\�J^�����~�$�Π���������ch Y�b@� ���^b3�w�8�`�#�0B8���ؑe z�bp TOS 7. It is also known as Receipts and Expenditure on Capital Account. ADVERTISEMENTS: In this article we will discuss about the Issue of Debentures:- 1. Usually, the debenture will be registered on a fixed and floating charge basis to provide additional security for the bank or financial institution. The conversion will be at a ratio of 20:1 after three years. ]/oC��Kzm�bY����y6}��c_�y��v�yߝ.�z���un��csyIwE�mh��v��ӯ��.������Ω�"l6�I��C_����9�rZv�o��v���5w���)T�|IL}iҵ?�i8v��X/�g����)R��w�����T�>�z��7/f��m���c�c�s�?�M�����j1��sd���,�ʬ��]LMyș��u�!���K䊹B�-�i��E�"l��[tfG�3��p�G�G�-�6g�A`�A`�A`�A`�A`�A&k(����� 2. (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 3. Content Guidelines 2. 50,000; Loose Plant 20% p.a. endstream endobj startxref ��>SI��*̪+� ���R�YE5q�Q�y9�%-s�*ʊ�^tsH�-��_������09/��榷�w}���ڰ(�=��+D���%�]��@u�&��Vӊ��7��K�N�CS?��п�-�-���:�ݺ궷��-��H�W�����n�(��G��6�BK��Z�A#1-'f|�&_:~��������[�a�☳��kB7�o��� �"!���,ƃjV!iԅő�\�Rl��b�� ����H}��lr�ꛔ��0�-���H����e����$�aZ�w���$���P�=L���L��I7oOM*�Ka�Ld�L),x`�6�"S�FK���0"�*�Z�T"��0Y*�r�Ia2�*�_������U^��X��ڀ��7c�H�VCƔ���4k5�“��l}l3�2ź� �aW��:T� �W.FA�[�u��è�>ٟ2�Pkq�^�:X#����9�L?�9:jp:E$02�>䃊B����"6�z�����R�7�:{ �}��bͱ'c̼��>q�'��8}+���={o��'݀�5�� �����@& ���2�Md�����d&V����\g�m���L{�����tי�83ͯ�i��c%�9N��69o���F�8����-c�2��2�3���g��2���)U��' (d) prohibits any invitation or acceptance of deposits from person other than its members, directors, and relatives. 100 each at par. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Disclaimer 9. During the year new shares issued Rs. 6 Share allotment account is a -----. Writing Off Discount. If debentures to be issued are Secured Debentures, a Debenture Trust Deed in Form No. During the year, it earned a profit of 75,000. Privacy Policy 8. �ү�+� Report a Violation, Preparation of Final Accounts Under Double Account System: 4 Components, Double Account System: Meaning, Features and Advantages | Electricity Accounts, Financial Statements of Life Insurance Companies. 5,000 and provision of 5% to be made for doubtful debts. 16. Issue 7 : Unreliable Investments Ltd. is holding following securities as current investments at the balance sheet date. Debentures are usually secured against the assets of the company. When debenture of rs.100 is issued for rs. It contains expenditure of a capital in the left hand side (or debit side) including additions to fixed assets. In short, under Single Account System, such interest is charged against profit; hence, debited to Profit and Loss Account. Transformer Rs, 50,000; Cables & Lines Rs. Debentures are generally freely transferable by the debenture holder. Prepare a Revenue Account, Net Revenue Account and the General Balance Sheet under the Double Account System, from the following Trial Balance as on 31.12.2009, of the Rural Electric Supply Co. Ltd. A Call of Re. Content Filtrations 6. Secured Debentures Banks and financial institutions use the debenture to secure their interests when providing any kind of finance where they believe there is a risk to them. ��c�=��c�=��c���+2=��c�=��m�. Debenture Redemption Reserve 4. Equity Shares No. Pass the necessary journal entries for the issue of debentures in the books of the company When debentures are issued at a premium of 25% to the vendors for machinery … 0 A total of 250,000 Debentures are being offered … Chapter 15: Company accounts Chapter learning objectives Upon completion of this chapter you will be able to: explain the difference between a sole trader and a limited liability company illustrate the IAS1 required presentation of 5, 00,000; Cables and Lines Rs. endstream endobj 203 0 obj <>stream … The company’s act 1956 allows the Company issuing debentures to purchase its own debentures from the open market if so authorized by it’s articles of association. Show the above items in the balance sheet of the company … h�bbd``b`��@�� H���V��$�����w !vH�� ��@Ōa �����? �h�x4�H���6E� '-Z+�)t�H��G�Z{qJ{��vކ�P2��ó�Oi�7Ӽlm�ӛ�Y�% "y"���z����Hh4]� These Debentures are being offered by Belize Electricity Limited (“the Company”) at a price of $100 per Debenture. T Ltd. has issued 14% Debentures of Rs. 40,000; Furniture 15% p.a. Debentures are shown in the balance sheet of the company under the item Secured loans. treated as an appropriation of profit since debentures and loans (long-term) are considered as a part of capital. The purpose of this account is to show the sources of total capital and the application of the same in different fixed assets. Financial Statements of a Company 151 amount paid for them. During the year, additions to Generation Plant was Rs. Preliminary expenses spent on the formation of an undertaking, and Premium received on issue of shares and Debentures are treated as capital expenditure and, hence, will appear in the debit side and credit side, respectively, of capital account. The assets are recorded in the right hand side (asset side) and liabilities are recorded in the left hand side (liabilities side), i.e. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. This is actually the second part of the Balance Sheet which contains current assets and current liabilities, together with the balance or totals of each side (as the case may be) of capital account. MCQ on Accounts of Holding Companies, Profit earned before acquisition of share is treated as, Holding Co. share in capital profits of subsidiary 3. Debentures can be secured against the assets of the company or may be unsecured. �;0! Non-convertible Debentures (NCDs) Non-convertible debentures are simply regular debentures, cannot be converted into equity shares of the liable company. Image Guidelines 5. N.B. h�b```�hV���2�0p8���Y��� Y����1D\`)`P+`�b;Đv�M�!Ԁ՝!� �7�k��ӂSy�?�ͳ��G�bp��&��X,��1X;0r� M]��um����{6��lY�i�VIM,X������ĔD�,