NCERT Solutions for Class 12 Accountancy Part 2 Chapter 2: The second chapter in Part two in Accountancy for CBSE Class 12 is Issue and Redemption of Debentures. And NCERT solutions for the same provides you with exercise questions, mostly those that are likely to appear in the exams so that you can answer them and get enough practice. It will also give the gist of the chapter. So, you can go through it to get a fair understanding of the CBSE Class 12 issue and redemption of debentures. By doing so, you will also be able to build on and enhance what you have already learned.
- All you need to know about NCERT Solutions Class 12 Accountancy
NCERT Solutions for Class 12 Accountancy Part 2 Chapter 2 PDF- Issue and Redemption of Debentures
Download Class 12 Accountancy Part 2 Chapter 2 NCERT Solutions PDF
The chapter, Issue and Redemption of Debentures, comes under part two in Accountancy for CBSE class 12. As the name suggests, the chapter talks about debentures and how you can get and use them. It also tells you about the differences between shares and debentures and their implications in stock market trading. The chapter concludes with the types of debentures and their uses.
In this chapter, you get to learn about debentures, which is an essential concept in Accountancy.
Class 12 Accountancy Part 2 Chapter 2 Issue and Redemption of Debentures – Overview
The chapter starts by explaining the term ‘debentures.’ The word comes from the Latin word, ‘debere,’ and stands for ‘borrow.’
So, a debenture is what a company gives in writing when it borrows money. Debentures typically have a certain specified period during which the company must repay the loan. The amount of time a company takes to repay the debenture is also sometimes at its discretion. However, most companies usually ask for about six months, up to a year.
Also, while there is a set interest rate for debentures, the security, according to Section 2 (30) of the Corporation Law, could be either in bonds or other company assets.
The chapter also tells you about the differences between shares and debentures. It says that while you can own shares, a debenture is an obligation. Also, while you get dividends as returns on stocks, you earn interest for bonds or debentures. The two are different because dividends are profits, while interests are the charges on those profits.
One other common difference between shares and debentures is that while the company does typically not withdraw the shares during the tenure, debentures have a specific time during which they are repayable.
Shares also give those who own them voting rights, while debentures do not give you any such rights. Another significant difference is that while you can convert shares into bonds and other such instruments, the reverse is not true.
There are two commonly used instruments when it comes to debentures. They are the secured debentures and the unsecured debentures. The difference lies in whether the lender levies charges or not. Secured debentures have charges that are of two types.
The lender can put a fixed or a floating charge on a secured debenture. Whereas, in the case of unsecured debentures, there are no such charges. However, many lenders do tend to levy floating charges, but that is entirely obligatory.
There are also other types of debentures, besides the ones discussed above. For instance, you have reimbursement debentures payable at the end of a specified period, as a lump sum amount or in installments.
Then you have the irredeemable debentures that are payable upon liquidation or during the business’s extension period.
Likewise, you also have two other types of debentures, called convertible and nonconvertible debentures. Convertible debentures are convertible to capital shares or other such securities, either fully or partially. But you cannot convert nonconvertible debentures.
Concepts covered in NCERT Solutions for Class 12 Accountancy Part 2 Chapter 2
- Meaning and definition of debentures
- Difference between Shares and Debentures
- Types of debentures
- Issue of debentures
- Interest on debentures
- Sinking fund method
Highly Important Links For CBSE Class 12 Accountancy
NCERT books and solutions are available for download as PDF. So, you can download them here, and start preparing for the exams:
Benefits of NCERT Solutions for Class 12 Accountancy Part 2 Chapter 2
Let us see what benefits NCERT solutions have to offer for students of CBSE class 11.
1. They allow you to Prepare for the Exams
By going through NCERT solutions, you can better prepare for the exams. The solutions have questions at the end of each chapter, which you can write answers to and become thorough.
2. They Let you Learn HigherOrder Concepts in the Subject
By studying the chapter on Debentures from NCERT solutions, you will learn those concepts you will use later when you pursue higher studies if you choose to specialize in Accountancy.
3. They are Easy to Understand
All the concepts in the solutions are as per the syllabus and are easy to grasp. So, by going through NCERT solutions for the chapter on debentures, you will understand it better and apply the same in the exams or when you pursue higher studies.
4. They Have Questions for Practice
The solutions have questions at the end of every chapter, and the one on Issue and Redemption of Debentures is no different. By writing answers to these questions, you will become thorough with the concepts and know how much you know.
We have covered the detailed guide on CBSE NCERT Solutions for Class 12 Accountancy Part 2 Chapter 2. Feel free to ask any questions in the comment section below.
FAQs on NCERT Solutions for Class 12 Accountancy Part 2 Chapter 2
What does debenture mean?
A debenture is a bond that is issued without any collateral. Instead, investors rely on the issuing entity’s general goodwill and reputation to obtain a return on its investment and interest income. If the debenture issuer defaults, the investors will be placed at the level of ordinary creditors in terms of their ability to recover money from the issuer.
What are the benefits of the CBSE NCERT Solutions for Class 12 Account Part 2 Chapter 2?
Go through the above blog for the benefits of solving NCERT Solutions for Class 12 Accountancy Part 2 Chapter 2.
What is ‘Capital Reserve’?
The reserve is created from profits of capital nature. These are the profits that are made from the activities of the business which are not operational in nature. These reserves are used to meet future capital losses that the business may incur.
Is it possible to get the NCERT Solutions for Class 12 Accountancy Part 2 Chapter 2 for free?
Yes, students can get the NCERT Solutions for Class 12 Accountancy Part 2 Chapter 2 in PDF format for free from the above article.
What is Mortgaged?
A mortgage is a loan that a borrower uses to buy or maintain a home or other type of real estate and agrees to pay off over time, usually in a series of regular payments. The asset acts as collateral to secure the loan.