Question

______ not required to be refunded during the lifetime of the business.

1. Preference shares
2. Debentures
3. Equity shares
4. Retained earnings

Options

• 1, 2, 3, 4

• 1, 2, 3

• Only 3 and 4

• 1, 2, 4

Answer 1

Equity shares and retained earnings are not required to be refunded during the lifetime of the business.

Explanation:

• Equity Shares: Represent the permanent capital of a company and are not required to be refunded during its lifetime.
• Retained Earnings: Are the profits kept in the business and never refunded to shareholders unless the company is liquidated.

Whereas:

• Preference Shares: May be redeemable (repayable after a certain period) or irredeemable (though rare now).
• Debentures: Are debt instruments and must be repaid after the maturity period.

Therefore, only Equity Shares and Retained Earnings are not required to be refunded during the lifetime of the business.