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Questions and Answers
What is the main purpose of accounting for debentures?
What is the main purpose of accounting for debentures?
- To calculate the company's total assets
- To determine the company's market share
- To analyze the company's cash flow
- To accurately record the issuance and redemption of debentures (correct)
How are debentures different from shares?
How are debentures different from shares?
- Debentures provide dividends, while shares do not
- Debentures offer voting rights, while shares do not
- Debentures represent a company's debt, while shares represent ownership in the company (correct)
- Debentures have no maturity date, while shares do
What is the impact of debenture interest on a company's profits?
What is the impact of debenture interest on a company's profits?
- Debenture interest has no impact on the company's profits
- Debenture interest is recorded as a separate source of income for the company
- Debenture interest increases the company's profits
- Debenture interest is a charge against profits and reduces the company's taxable income (correct)
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