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State two differences between Share Capital and Loan Capital. - Accounts

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Question

State two differences between Share Capital and Loan Capital.

Distinguish Between
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Solution

  1. Those who provide share capital, known as shareholders, are considered the owners of the company, while those who provide loan capital, such as debentureholders, are treated as the creditors of the company.
  2. Shareholders receive dividends from the company, whereas debentureholders are entitled to interest payments from the company.
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Chapter 7: Company Accounts - Issue of Debentures - SHORT ANSWER QUESTIONS [Page 7.54]

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D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 7 Company Accounts - Issue of Debentures
SHORT ANSWER QUESTIONS | Q 18. | Page 7.54
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