Question

Assertion (A): Irredeemable debentures are also known as perpetual debentures.

Reason (R): The company does not give any undertaking for the repayment of money borrowed by issuing such debentures. They are repayable on the winding-up of the company or on the expiry of a long period.

In the context of above two statements, which of the below options is correct?

Options

• Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).

• Assertion (A) is incorrect but Reason (R) is correct.

• Both Assertion (A) and Reason (R) are incorrect.

Answer 1

Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).