Question

Assertion (A): Debenture holders are termed as creditors of the company.
Reason (R): Debentures are fixed charge funds and do not participate in profits of company.
(a) Both (A) and (R) are correct.
(b) (b) Both (A) and (R) are incorrect.
(c) (A) is correct but (R) is incorrect.
(d) (A) is incorrect but (R) is correct.

Answer 1

Answer:

Both A and R are correct

Explanation:

Debenture holders are considered as the creditors of the company as the amount is payable to debenture holders....

Yes it is also true that debentures are the fixed charge funds..No matter company is going in profits or losses the debenture holders get the fixed amt of interest on their funds

Answer 2

The correct option is (a) Both (A) and (R) are correct.

• A debenture is one of a company's most common types of long-term loans. It is typically a mortgage to be repaid on a particular date, but some debentures are irredeemable investments.
• The term debenture holder refers to someone who owns debentures. They are however just represented as the firm's creditor.
• These are also fixed-charge funds that do not have any share in the firm's earnings.