Debentures Suspense Account appears on the liability side of the Balance Sheet of a Company. [MTP Jan. 2025]
For any discrepancies in this question, email contact@cadada.in
Company AccountsQ-7 | Issue of DebenturesQuestion 4906 of 112
All Questions Ad
Detailed Solution & Explanation
False: Debentures Suspense Account appears on assest side of Balance Sheet under Non-
current Asset.
PRACTICAL QUESTIONS
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 SyllabusExam Strategy Tip
This topic carries 15-20% weightage. Focus on understanding core concepts rather than memorizing.
Key Concepts to Understand
Balance Sheet
A statement showing the financial position of a business at a particular date, listing all assets on one side and all liabilities and capital on the other side. It is not an account but a statement.
Suspense Account
A temporary ledger account used to record transactions when there is uncertainty about the correct classification, or to make the Trial Balance agree when errors are suspected. It is closed once the errors are located and rectified.
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.
Related Comparison Tables
More Questions from Company Accounts
Reserve Capital
Cumulative preference shares
Minimum subscription
Reserve Capital and Capital Reserve carry the same meaning.
As per Table F, the Minimum rate of interest that can be charged on calls- in-Arrear and that can be allowed on calls-in-advance are 10% p.m. and 12% p.m. respectively.
Re-issue of forfeited shares is allotment of shares but not a sale. [May 2018, 2 Marks]
Ready to Master Company Accounts?
Practice all 112 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.
Start Practicing — It's Free