Question

Which of the following statements is false?

Options

• At maturity, debenture holders get back their money.

• Debentures can be forfeited for non-payment of call money.

• In the company’s balance sheet, debentures are shown under the head Long term Borrowings.

• Interest on debentures is a charge against profits.

Answer 1

Debentures can be forfeited for non-payment of call money.

Explanation:

Shares can be forfeited by the firm for non-payment of call money by the shareholders. Debentures cannot be forfeited by the shareholders for non-payment of call money.