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Important Questions and Answers for Class 12 Accountancy Chapter 2 Issue and Redemption of Debentures 2025-26

Q: 1. What types of important questions can be expected from Issue and Redemption of Debentures in Class 12 Accountancy?

You can expect MCQs, short answer, long answer, practical questions, and case-based questions from this chapter. Focus areas include issue methods, journal entries, interest calculations, and redemption procedures. Practicing diverse formats helps you prepare for exam-focused important questions as per the latest CBSE pattern.

Q: 3. Where can I find important questions with answers for issue and redemption of debentures class 12 as PDF?

You can download the compiled issue of debentures class 12 important questions pdf and detailed answers from this chapter on Vedantu’s website. PDFs are organized by question type and are updated for CBSE Accountancy 2025–26 exam pattern, making revision convenient and targeted.

Q: 6. How can I quickly revise high-weightage subtopics in Issue and Redemption of Debentures?

For quick revision, focus on journal entries for issue and redemption, calculation of interest on debentures, treatment of premium/discount, and case study questions. Use flash notes, mark important formulas, and practice MCQ questions on issue of debentures class 12 for speed and accuracy.

Q: 7. Are MCQ and assertion-reason type questions included for this chapter in CBSE exams?

Yes, the CBSE exam includes MCQ and assertion-reason type questions on Issue and Redemption of Debentures. These test your conceptual understanding and ability to apply rules. Regularly practice objective questions using school sample papers and the practice PDFs to build confidence for the exam.

Issue of Debentures Class 12 Important Questions PDF with Detailed Solutions

Find all the exam-focused questions you need for Important Questions Class 12 Accountancy Part 2 Chapter 2 Issue and Redemption of Debentures. This page brings you issue of debentures class 12 important questions pdf, designed as per the latest CBSE pattern. All questions follow the NCERT syllabus to help you prepare for your board exams.

This chapter covers how companies issue and redeem debentures, with practical questions and detailed solutions. You will also find issue of debentures questions and answers pdf, which makes understanding the marking scheme easier. Each answer uses the correct terms and simple steps, matching what examiners expect.

Vedantu’s Important Questions with Answers are perfect for last-minute revision and practice. Every question has a clear, stepwise answer to help you score better. You can easily download the free Important Questions PDF to study offline anytime.

Issue of Debentures Class 12 Important Questions PDF with Detailed Solutions

1. Multiple choice questions.

1. Debentures are generally issued to raise:

(a) Share capital
(b) Short-term loans
(c) Long-term debt funds
(d) Profits

Answer: (c) Long-term debt funds

2. When debentures are issued at a discount and redeemed at a premium, the loss is called:

(a) Discount on Issue of Debentures
(b) Premium on Redemption
(c) Loss on Issue of Debentures
(d) Profit on Issue of Debentures

Answer: (c) Loss on Issue of Debentures

3. Which of the following is NOT a method of redemption of debentures?

(a) Lump sum payment
(b) By conversion
(c) By issuing preference shares
(d) By installment

Answer: (c) By issuing preference shares

4. Debentures holders are:

(a) Owners of the company
(b) Lenders to the company
(c) Members of board
(d) None of these

Answer: (b) Lenders to the company

2. Very Short Answer (VSA).

1. What is a debenture?

Answer: A debenture is a written instrument acknowledging a company’s debt with a promise to pay interest and repay the principal at a specified time.

2. State one difference between shares and debentures.

Answer: Shares represent ownership in a company, while debentures are acknowledgment of a loan given to the company.

3. Name any two types of debentures based on convertibility.

Answer: Convertible debentures and Non-convertible debentures.

3. Short Answer Questions.

1. Explain the accounting treatment for debentures issued as collateral security.

Answer: When debentures are issued as collateral security for a loan, two treatments exist. Either no entry is made and it is disclosed in the notes, or Debenture Suspense Account is debited and Debentures Account is credited. This accounting highlights that the debentures serve as additional security.

2. What do you understand by 'Interest on Debentures' and how is it recorded in accounts?

Answer: Interest on debentures is a fixed payment to debenture holders, regardless of company profit, and is charged to profit and loss. It is usually paid half-yearly and recorded after deducting applicable tax (TDS), debiting Interest account and crediting Debentureholders account.

3. State any two differences between shares and debentures.

Answer: (i) Shares represent ownership; debentures are debt. (ii) Shareholders get dividends only if there is profit, debenture holders get fixed interest regardless of profit.

4. Give journal entries for the issue of debentures at premium.

Answer:

Bank A/c Dr.
To Debentures A/c
To Securities Premium Reserve A/c

5. What are the different methods of redeeming debentures?

Answer: Debentures can be redeemed by lump sum payment at maturity, by periodic installments, by purchase in open market, or by conversion into shares or new debentures as per the terms of issue.

4. True or False Questions.

1. Debentures generally carry voting rights in a company.

Answer: False

2. Debentures can be converted into shares if the terms allow.

Answer: True

3. Interest on debentures is paid only if there are profits.

Answer: False

4. Debentures always need to be secured with the assets of the company.

Answer: False

3. Fill in the Blanks Questions.

1. The _____ acknowledges the debt owed by a company to the holder.

Answer: Debenture

2. Loss on issue of debentures includes discount on issue plus _____ on redemption.

Answer: Premium

3. When debentures are issued at par and redeemed at a premium, the extra amount payable at redemption is called _____ on redemption.

Answer: Premium

4. Debentures issued for setting liabilities for assets purchased are said to be issued for _____ other than cash.

Answer: Consideration

5. Redemption of debentures by periodic payments is termed as redemption by _____.

Answer: Installments

Benefits of Knowing Issue and Redemption of Debentures for CBSE Students

Understanding the issue of debentures class 12 important questions pdf helps students build fundamentals for board exams. It covers real-world applications and practical concepts tested in the CBSE Accountancy syllabus and aligns with topics likely to appear in actual papers.

These issue of debentures questions and answers pdf and redemption of debentures problems and solutions pdf guide students through stepwise working and exam formats. Practicing these ensures confidence while attempting mcq questions on issue of debentures class 12 and complex application problems.

Referring to the latest issue of debentures class 12 practical questions with solutions and issue of debentures class 12 pdf gives clarity on formats like journal entries, distinctions, and fill-in-the-blanks, matching the current CBSE 2025-26 syllabus requirements for Accountancy.

FAQs on Important Questions and Answers for Class 12 Accountancy Chapter 2 Issue and Redemption of Debentures 2025-26

1. What types of important questions can be expected from Issue and Redemption of Debentures in Class 12 Accountancy?

You can expect MCQs, short answer, long answer, practical questions, and case-based questions from this chapter. Focus areas include issue methods, journal entries, interest calculations, and redemption procedures. Practicing diverse formats helps you prepare for exam-focused important questions as per the latest CBSE pattern.

2. How should I answer practical questions on issue of debentures in the exam?

Start with a clear heading, write correct journal entries, and show calculations step-by-step. Always:

Label narrations properly in entries.
Underline key terms like 'at par', 'at premium', or 'at discount'.
Follow the NCERT format for maximum marks.

3. Where can I find important questions with answers for issue and redemption of debentures class 12 as PDF?

You can download the compiled issue of debentures class 12 important questions pdf and detailed answers from this chapter on Vedantu’s website. PDFs are organized by question type and are updated for CBSE Accountancy 2025–26 exam pattern, making revision convenient and targeted.

4. How do I score full marks in long answer questions on redemption of debentures?

To get full marks, structure your answer with an introduction, stepwise explanation, and concluding statement. Include these points:

State the relevant method (e.g., lump sum, draw of lots)
Show all calculations neatly
Underline important accounting terms
Follow CBSE step marking scheme

5. What are common mistakes to avoid in issue and redemption of debentures practical questions?

Students often lose marks due to incomplete journal entries, missing narrations, or wrong calculations. To avoid these:

Double-check entries and totals
Use headings for sections
Don’t skip calculations or final statements

6. How can I quickly revise high-weightage subtopics in Issue and Redemption of Debentures?

For quick revision, focus on journal entries for issue and redemption, calculation of interest on debentures, treatment of premium/discount, and case study questions. Use flash notes, mark important formulas, and practice MCQ questions on issue of debentures class 12 for speed and accuracy.

7. Are MCQ and assertion-reason type questions included for this chapter in CBSE exams?

Yes, the CBSE exam includes MCQ and assertion-reason type questions on Issue and Redemption of Debentures. These test your conceptual understanding and ability to apply rules. Regularly practice objective questions using school sample papers and the practice PDFs to build confidence for the exam.