Company AccountsQ-4 | Issue of DebenturesQuestion 4903 of 112
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A fixed charge generally covers all the assets of the company including future one. [Dec. 2022, 2 Marks]

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Detailed Solution & Explanation

False: Fixed charge is created on those assets which are specific (movable or immovable) and is identifiable whereas floating charge is created on the entire class of assets and covers both existing & future assets.

About This Chapter: Partnership & Companies

Paper

Paper 1: Accounting

Weightage

15-20%

Key Topics

Admission, Retirement, Death, Shares, Debentures

This chapter covers Admission, Retirement, Death, Shares, Debentures and is part of Paper 1: Accounting in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 15-20% weightage. Focus on understanding core concepts rather than memorizing.

Key Concepts to Understand

Debentures

Long-term debt instruments issued by a company to the public for raising loan capital, carrying a fixed rate of interest (coupon rate) payable regardless of profit. Debenture holders are creditors, not owners, of the company.

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Reserve Capital and Capital Reserve carry the same meaning.

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Re-issue of forfeited shares is allotment of shares but not a sale. [May 2018, 2 Marks]

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