%PDF-1.5 %���� 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. … 5, 00,000; Cables and Lines Rs. There are 15 questions in this test with each question having around four answer choices. �.�� ɀ�� T�3a�$�EŸ��4K��hL�,��3�30�09p*1V���q��B#?��oAJ�x��0�a`M`e�O`�̰���D���Lb�� �v �� ` ���� 2, 00,000. 16. A total of 250,000 Debentures are being offered … h�bbd``b`��@�� H���V��$�����w !vH�� ��@Ōa �����? h�̖ao�8�����8v�B�n)��P�Ж�U(�����&K���_�;�nE{�j���d9v����d�$*QB Debenture Redemption Reserve 4. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Mains (including addition) Rs. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. Copyright 10. The purpose of this account is to show the sources of total capital and the application of the same in different fixed assets. It contains expenditure of a capital in the left hand side (or debit side) including additions to fixed assets. A. personal account B. Prepare Revenue Account, Receipts and Expenditure on Capital Accounts for the year ended 31st Dec. 2009 and a Balance Sheet as on that date. 50,000 and Mains Rs. 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. … Real account C. Nominal account D. Impersonal account 2. 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 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. %%EOF . If debentures to be issued are Secured Debentures, a Debenture Trust Deed in Form No. X holding 500 shares paid only application and allotment money whereas Y holding 400 shares did not pay final call. A company issued debentures of the face value of Rs,5,00,000 at a discount of 6% on January 01, 2001. The conversion will be at a ratio of 20:1 after three years. 5,000 and provision of 5% to be made for doubtful debts. Plagiarism Prevention 4. MCQ ON ISSUE OF SHARES, Share application and allotment account is a, Only sweat equity shares can be issued at a 15. Proposed Dividend 20% of closing balance of shares capital. 10,00,000 repayable after 5 years; (c) Interest on debentures is yet to be paid. 5 per share was payable on 30th June 2009. It is also known as Receipts and Expenditure on Capital Account. endstream endobj startxref treated as an appropriation of profit since debentures and loans (long-term) are considered as a part of capital. General reserve a/c C. Capital reserve a/c D. Redemption reserve a/c 41. �ү�+� Interest on Loan and Interest on debentures are shown on the debit side of the Net Revenue Account, i.e. As a ]/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(����� 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. Certain other items, e.g. 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 100 each; (b) Bank Loan of Rs. Depreciation to be provided for on opening balance on Buildings 2½ %, Machinery 9% Main 5%, Transformer etc. 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. 1, 00,000. 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. Issue 7 : Unreliable Investments Ltd. is holding following securities as current investments at the balance sheet date. �;0! "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 These Debentures are being offered by Belize Electricity Limited (“the Company”) at a price of $100 per Debenture. 4����0���\z~ѽuyh��y�������ϫq=)�ՠj����b: M�ơ=U��%M?M?4-�s�������8T�pN�0_��l� +% �y3 95 and it is redeemable at rs. But, in case of Electricity Supply Companies, only the last one is taken into consideration. ��c�=��c�=��c���+2=��c�=��m�. �#�6 i���.����G�+zM���zG�4����N�#�I9�ehڼ��9�7��s��0�6��ס1�벮p],r�Ф.˼�@Q�j��s����6R| qg����i~���� But, in case of Electricity Supply Companies, only the last one is taken into consideration. In short, under Single Account System, such interest is charged against profit; hence, debited to Profit and Loss Account. 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�, 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. 199 0 obj <> endobj Debentures in accounting represent the medium to long term instrument of debt that the large companies use to borrow money. It … 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 Share allotment account is a -----. debentures of the company. 6 Besides, the Balance of Revenue Account is transferred to Net Revenue Account and Balance of Net Revenue Account is transferred to General Balance Sheet. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. All items of expenditure appear on the debit side whereas all items of income appear on the credit side of Revenue Account. Privacy Policy 8. 5. 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. �h�x4�H���6E� '-Z+�)t�H��G�Z{qJ{��vކ�P2��ó�Oi�7Ӽlm�ӛ�Y�% "y"���z����Hh4]� Prepare Revenue Account, Net Revenue Account, Capital Account for the year ended 31.3.06 and a General Balance Sheet on the date. Transformer Rs, 50,000; Cables & Lines Rs. Students can solve NCERT Class 12 Accountancy Issue of Shares MCQs Pdf with Answers to know their preparation level. 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. Let us study this in detail Now debentures can be issued for cash or some other consideration or as collateral security. The issue of Debentures is very similar to the issue of shares by a company. 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. Meaning of Issue of Debentures 2. A company is said to be Deemed Public Company … Expenses on Issue of Debentures Account 3. PDF … on changes to the rights attached to the debentures. Depreciation Fund, etc., also will appear in the Balance Sheet. �ү�+� When debenture of rs.100 is issued for rs. Disclaimer 9. PDF Download was Prepared Based on Latest Exam Pattern. It decided to transfer 15,000 to Debentures Redemption Reserve 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 6X It corresponds with the ordinary Profit and Loss Account (prepared under Single Account System) where the expenses are grouped under appropriate headings. �ү�+� Content Guidelines 2. In case of debentures they are not secured by providing a collateral or Contents: Meaning of Issue of Debentures Expenses on Issue of Debentures Account Debenture Redemption Reserve Issue of Debentures as […] Debentures are usually secured against the assets of the company. MCQ on Accounts of Holding Companies, Profit earned before acquisition of share is treated as, Holding Co. share in capital profits of subsidiary 3. A company has an opening credit balance in Surplus, i.e., Balance in Statement of Profit and Loss of 1,00,000. Writing Off Discount. (ii) A Call of Rs. Depreciation: Land & Building 2½% p.a, Generation Plant (on addition 1/2 year) 10% p.a. (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. Show the above items in the balance sheet of the company … In short; It corresponds with the ordinary Profit and Loss Appropriation Account of a trading concern prepared under Single Account System. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. ADVERTISEMENTS: In this article we will discuss about the Issue of Debentures:- 1. Content Filtrations 6. 4, 00,000 and Debentures issued Rs. T Ltd. has issued 14% Debentures of Rs. endstream endobj 203 0 obj <>stream The assets are recorded in the right hand side (asset side) and liabilities are recorded in the left hand side (liabilities side), i.e. 5 premium, the amount which should be debited to loss on redemption of debenture a/c is ____. 100 each at par. 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 220 0 obj <>stream N.B. Debentures are shown in the balance sheet of the company under the item Secured loans. Before publishing your articles on this site, please read the following pages: 1. TOS 7. 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. N.B. 10%, Meters and Electrical Instruments 15%, Advertising has been prepaid by Rs. Prohibited Content 3. �ү�+� Debenture premium cannot be �ү�+� The term debenture is used interchangeably with terms bond, note, or loan stock. 3. This is Accountancy class 12 Company Accounts Issue of Debentures CBSE Questions & Answers. Full amount is payable on application, Pass journal entries. Collateral Security 5. ���(g��|o�h�w [1s]�-|[��ϱE�˘����N�b�@��� \1�O/~R�-ۢf����xîI|X�)��ڳ=,���&�T"���xg�� �� Beta Ltd issued 5,000, 9% debentures of Rs.500 each. 1 per share was payable on 30.6.2009 and arrears are subject to interest at 10% p.a. During the year new shares issued Rs. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 10 Financial Statements of Companies. 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. Usually, the debenture will be registered on a fixed and floating charge basis to provide additional security for the bank or financial institution. After the redemption of all debentures, the balance in sinking fund is transferred to A. Sf investment a/c B. On March 31, 2006, the amount shown as “interest Equity Shares No. … (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. During the year, it earned a profit of 75,000. The directors Debentures can be secured against the assets of the company or may be unsecured. 50,000; Transformers Rs. They are debentures without the convertibility feature attached to them. (d) prohibits any invitation or acceptance of deposits from person other than its members, directors, and relatives. k(�����*k���ү�+� 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. Financial Statements of a Company 151 amount paid for them. 50,000; Loose Plant 20% p.a. it is prepared in its usual form. 1. Shown in the Equity and Liability part of the Balance Sheet under the head ‘Shareholders’ fund and sub-head ‘Reserves and Surplus’. (a) 25,000, 10% debentures of Rs. 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.