Day: December 5, 2021

Which statements are true about debentures and ordinary shares?

Select ONE answer:

1. debentures can be issued at a premium & ordinary shares are never issued at a premium
2. debenture holders are owners of a company & ordinary share holders are creditors of a company
3. debenture interest is a charge against profit & ordinary share dividends are an appropriation of profit
4. debenture interest varies from year to year & ordinary share dividends are paid at the same rate each year

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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