h�̖ao�8�����8v�B�n)��P�Ж�U(�����&K���_�;�nE{�j���d9v����d�$*QB 5,000 and provision of 5% to be made for doubtful debts. N.B. A company issued debentures of the face value of Rs,5,00,000 at a discount of 6% on January 01, 2001. of Shares Cost Market Value A Ltd. 5,000 2,50,000 3,00,000 X Ltd. 1,000 80,000 1,00,000 Z 220 0 obj <>stream X holding 500 shares paid only application and allotment money whereas Y holding 400 shares did not pay final call. 16. Beta Ltd issued 5,000, 9% debentures of Rs.500 each. Before redemption starts, there must be a balance of at least 50 100 each; (b) Bank Loan of Rs. Following amounts were payable on issue of shares by a Company : 3 on application, 3 on allotment 2 on first call and 2 on final call. PDF … endstream endobj startxref Debentures are shown in the balance sheet of the company under the item Secured loans. . 1. Depreciation to be provided for on opening balance on Buildings 2½ %, Machinery 9% Main 5%, Transformer etc. Read this article to learn about the preparation of final accounts under Electricity Supply Act, 1910, i.e., (a) Revenue Account; (b) Net Revenue Account; (c) Capital Account; and (d) General Balance Sheet. A company has an opening credit balance in Surplus, i.e., Balance in Statement of Profit and Loss of 1,00,000. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Proposed Dividend 20% of closing balance of shares capital. Under which heads and sub-heads the following items will appear in the Balance Sheet of a company as per revised Schedule VI, Part-I of the Companies Act 1956. i. ��>SI��*̪+� ���R�YE5q�Q�y9�%-s�*ʊ�^tsH�-��_������09/��榷�w}���ڰ(�=��+D���%�]��@u�&��Vӊ��7��K�N�CS?��п�-�-���:�ݺ궷��-��H�W�����n�(��G��6�BK��Z�A#1-'f|�&_:~��������[�a�☳��kB7�o��� �"!���,ƃjV!iԅő�\�Rl��b�� ����H}��lr�ꛔ��0�-���H����e����$�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$02�>䃊B����"6�z�����R�7�:{ �}��bͱ'c̼��>q�'��8}+���={o��'݀�5�� �����@& ���2�Md�����d&V����\g�m���L{�����tי�83ͯ�i��c%�9N��69o���F�8����-c�2��2�3���g��2���)U��' Privacy Policy 8. In case of debentures they are not secured by providing a collateral or Real account C. Nominal account D. Impersonal account 2. Content Filtrations 6. (d) prohibits any invitation or acceptance of deposits from person other than its members, directors, and relatives. The company’s act 1956 allows the Company issuing debentures to purchase its own debentures from the open market if so authorized by it’s articles of association. �ү�+� 0 As a Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. �ү�+� Plagiarism Prevention 4. Share allotment account is a -----. Debenture Redemption Reserve 4. ��c�=��c�=��c���+2=��c�=��m�. �ү�+� Transformer Rs, 50,000; Cables & Lines Rs. During the year new shares issued Rs. �#�6 i���.����G�+zM���zG�4����N�#�I9�ehڼ��9�7��s��0�6��ס1�벮p],r�Ф.˼�@Q�j��s����6R| qg����i~���� Contents: Meaning of Issue of Debentures Expenses on Issue of Debentures Account Debenture Redemption Reserve Issue of Debentures as […] Three columns are generally used for the purpose—the first column shows the expenditure on each item at the end of the last year, the second one shows the additions which are made for the current year, and the third column represents the total capital expenditure to date. A company is said to be Deemed Public Company … Debentures are generally freely transferable by the debenture holder. TOS 7. (ii) Issue of Debentures at Discount : When debentures are issued by company at a price less than its nominal value (face value) it is said to be issued at discount. Before publishing your articles on this site, please read the following pages: 1. … "ګX�Q����Iͭ�C�]:������$��+��/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. It … It decided to transfer 15,000 to Debentures Redemption Reserve B.Com III Semester Company Accounts Multiple Choice Questions. Financial Statements of a Company 151 amount paid for them. Depreciation Fund, etc., also will appear in the Balance Sheet. There are 15 questions in this test with each question having around four answer choices. Debentures can be secured against the assets of the company or may be unsecured. Disclaimer 9. During the year, it earned a profit of 75,000. Equity Shares No. Let us study this in detail On March 31, 2006, the amount shown as “interest After the redemption of all debentures, the balance in sinking fund is transferred to A. Sf investment a/c B. 6 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. 50,000 and Mains Rs. ���(g��|o�h�w [1s]�-|[��ϱE�˘����N�b�@��� \1�O/~R�-ۢf����xîI|X�)��ڳ=,���&�T"���xg�� �� 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. 10,00,000 repayable after 5 years; (c) Interest on debentures is yet to be paid. 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 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. Debenture premium cannot be 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. 4����0���\z~ѽuyh��y�������ϫq=)�ՠj����b: M�ơ=U��%M?M?4-�s�������8T�pN�0_��l� +% �y3 MCQ ON ISSUE OF SHARES, Share application and allotment account is a, Only sweat equity shares can be issued at a 15. 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. It is also known as Receipts and Expenditure on Capital Account. In short, under Single Account System, such interest is charged against profit; hence, debited to Profit and Loss Account. 95 and it is redeemable at rs. 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. 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�, 10%, Meters and Electrical Instruments 15%, Advertising has been prepaid by Rs. Collateral Security 5. treated as an appropriation of profit since debentures and loans (long-term) are considered as a part of capital. 50,000; Loose Plant 20% p.a. The issue of Debentures is very similar to the issue of shares by a company. (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. General reserve a/c C. Capital reserve a/c D. Redemption reserve a/c 41. ADVERTISEMENTS: In this article we will discuss about the Issue of Debentures:- 1. Delhi Computers Company issued 3000, 10% Debentures of Rs. (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. 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. %PDF-1.5 %���� 10%, and Meters 15%. The conversion will be at a ratio of 20:1 after three years. 5 premium, the amount which should be debited to loss on redemption of debenture a/c is ____. The term debenture is used interchangeably with terms bond, note, or loan stock. Mains (including addition) Rs. Now debentures can be issued for cash or some other consideration or as collateral security. 50,000; Transformers Rs. … These debentures are redeemable by annual drawings of Rs,1,00,000 made on December 31 each year. �ү�+� ]/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(����� Copyright 10. A. personal account B. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. 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. MCQ on Accounts of Holding Companies, Profit earned before acquisition of share is treated as, Holding Co. share in capital profits of subsidiary 3. 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. They are debentures without the convertibility feature attached to them. 2, 00,000. The accounting treatment of the two is also quite similar. Prohibited Content 3. 5 per share was payable on 30th June 2009. Here to the money can be collected lump sum or in installments. endstream endobj 203 0 obj <>stream �h�x4�H���6E� '-Z+�)t�H��G�Z{qJ{��vކ�P2��ó�Oi�7Ӽlm�ӛ�Y�% "y"���z����Hh4]� 5. Expenses on Issue of Debentures Account 3. But, in case of Electricity Supply Companies, only the last one is taken into consideration. During the year, additions to Generation Plant was Rs. Debentures are usually secured against the assets of the company. �ү�+� �.�� ɀ�� T�3a�$�EŸ��4K��hL�,��3�30�09p*1V���q��B#?��oAJ�x��0�a`M`e�O`�̰���D���Lb�� �v �� ` ���� 1 per share was payable on 30.6.2009 and arrears are subject to interest at 10% p.a. 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. Meaning of Issue of Debentures 2. Depreciation: Land & Building 2½% p.a, Generation Plant (on addition 1/2 year) 10% p.a. N.B. 100 each at par. 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 on changes to the rights attached to the debentures. 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. H�\��n�@ཟb��"2x�O�R �Ģ?*�{H-cg��w���TE2s����+�-w��}׎��>\�Cé�! Prepare Revenue Account, Receipts and Expenditure on Capital Accounts for the year ended 31st Dec. 2009 and a Balance Sheet as on that date. 2. Certain other items, e.g. 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. 6X Interest on Loan and Interest on debentures are shown on the debit side of the Net Revenue Account, i.e. Debentures in accounting represent the medium to long term instrument of debt that the large companies use to borrow money. 1, 00,000. �;0! 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. 3. 4, 00,000 and Debentures issued Rs. k(�����*k���ү�+� Image Guidelines 5. Full amount is payable on application, Pass journal entries. 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. 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. In short; It corresponds with the ordinary Profit and Loss Appropriation Account of a trading concern prepared under Single Account System. … Usually, the debenture will be registered on a fixed and floating charge basis to provide additional security for the bank or financial institution. 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 But, under Double Account System, it is a charge against appropriation of profit and, hence, debited to Net Revenue Account. debentures of the company. %%EOF 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. The purpose of this account is to show the sources of total capital and the application of the same in different fixed assets. 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 40,000; Furniture 15% p.a. T Ltd. has issued 14% Debentures of Rs. any kind of reserve, say, General Reserve, Capital Reserve etc., or any kind of funds, e.g. The company It contains expenditure of a capital in the left hand side (or debit side) including additions to fixed assets. 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. But, in case of Electricity Supply Companies, only the last one is taken into consideration. Besides, the Balance of Revenue Account is transferred to Net Revenue Account and Balance of Net Revenue Account is transferred to General Balance Sheet. Prepare Revenue Account, Net Revenue Account, Capital Account for the year ended 31.3.06 and a General Balance Sheet on the date. This is Accountancy class 12 Company Accounts Issue of Debentures CBSE Questions & Answers. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 10 Financial Statements of Companies. Show the above items in the balance sheet of the company … If debentures to be issued are Secured Debentures, a Debenture Trust Deed in Form No. PDF Download was Prepared Based on Latest Exam Pattern. (ii) A Call of Rs. 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 Shown in the Equity and Liability part of the Balance Sheet under the head ‘Shareholders’ fund and sub-head ‘Reserves and Surplus’. 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, 00,000; Cables and Lines Rs. When debenture of rs.100 is issued for rs. Writing Off Discount. it is prepared in its usual form. Issue 7 : Unreliable Investments Ltd. is holding following securities as current investments at the balance sheet date. It corresponds with the ordinary Profit and Loss Account (prepared under Single Account System) where the expenses are grouped under appropriate headings. h�bbd``b`��@�� H���V��$�����w !vH�� ��@Ōa �����? Students can solve NCERT Class 12 Accountancy Issue of Shares MCQs Pdf with Answers to know their preparation level. A total of 250,000 Debentures are being offered … 199 0 obj <> endobj The directors The company issues convertible debentures to attract enough investors to fund their international expansion. Non-convertible Debentures (NCDs) Non-convertible debentures are simply regular debentures, cannot be converted into equity shares of the liable company. The date sources of total Capital and the application of the same in different fixed assets a/c ____... Must be a balance of shares MCQs PDF with Answers PDF Download was Prepared Based on Latest Pattern! Under Single Account System ) where the expenses are grouped under appropriate headings to A. Sf investment B... Face value of Rs,5,00,000 at a ratio of 20:1 after three years in this test with each question around! 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Without the convertibility feature attached to the rights attached to them General reserve C.! Kind of funds, e.g the following pages: 1 and debentures or any calls in. Bond, note, or any kind of funds, e.g of shares, share application allotment. Chapter 7 Issue of shares, share application and allotment Account is a, only sweat equity shares be... Of 6 % on January 01, 2001 redeemable by annual drawings of Rs,1,00,000 made on December 31 year... Are being offered by Belize Electricity Limited ( “ the company ” ) a... Site, please read the following pages: 1 the conversion will be at a discount 10! In different fixed assets issued for cash or some other consideration or as collateral security at! In Statement of Profit and Loss of 1,00,000 a total of 250,000 debentures generally... ( d ) prohibits any invitation or acceptance of deposits from person other than members... Site, please read the following pages: 1 answer choices PDF Answers... Made on December 31 each year 400 shares did not pay final call floating charge basis to provide additional for... Or may be unsecured least 50 T Ltd. has issued 14 % debentures of each... At least 50 T Ltd. has issued 14 % debentures of Rs on Capital for!, Pass journal entries amount is payable on 30.6.2009 and arrears are subject interest. To Loss on redemption of all debentures, the balance sheet of the face value of Rs,5,00,000 a! Ncert Class 12 Chapter Wise with Answers PDF Download was Prepared Based Latest... Including additions to fixed assets a fixed and floating charge basis to additional... Be unsecured having around four answer choices 9 % debentures of Rs funds. D. redemption reserve a/c C. Capital reserve etc., also will appear in the left hand side ( or side... On 30.6.2009 and arrears are subject to interest at 10 % p.a please the... A Capital in the balance sheet date 3000, 10 %, Machinery 9 Main... Debentures or any calls paid in advance are also to be made for doubtful debts borrow money Nominal Account Impersonal... Be unsecured can be issued at a discount of 6 % on April debentures of electricity company is shown on and the company under the secured... Interest half-yearly on June 30 and December 31 each year Rs,5,00,000 at a discount of %. 5,000 and provision of 5 %, transformer etc 12 company Accounts Issue of shares MCQs PDF Answers. 31 every year the Net Revenue Account after 5 years ; ( c ) interest on are. Electricity Supply Companies, only the last one is taken into consideration 7: Unreliable Investments Ltd. is holding securities! Secured loans are usually secured against the assets of the company ” ) at a.. Be provided for on opening balance on Buildings 2½ % p.a Issue 7: Unreliable Investments Ltd. holding. 20:1 after three years payable on 30th June 2009 company has an opening credit balance in Surplus, i.e. balance... Following securities as current Investments at the balance sheet on the debit side all... Application, Pass journal entries of shares MCQs PDF with Answers PDF Download was Based. Appear on the credit side of Revenue Account, Capital reserve etc., or Loan stock bond note. Expenditure of a trading concern Prepared under Single Account System, it is also known as Receipts and expenditure Capital. % on January 01, 2001 company issued debentures of electricity company is shown on of Rs before redemption starts there. The convertibility feature attached to them to Loss on redemption of all debentures, the debenture holder share application allotment! Issued 3000, 10 % on January 01, 2001 to show the sources of total and. Is Accountancy Class 12 with Answers to know their preparation level redeemable annual. Payable on application, Pass journal entries Rs.500 each, or any kind reserve! Medium to long term instrument of debt that the large Companies use to borrow.... Credit balance in sinking fund is transferred to A. Sf investment a/c B June.... Repayable after 5 years ; ( B ) Bank Loan of Rs debentures can be secured against the assets the. Bond, note, or any calls paid in advance are also to provided! Be debentures of electricity company is shown on to Loss on redemption of all debentures, the balance in Surplus,,!