Question

Debenture is the part of:

• A. Share capital
• B. Long-term borrowings
• C. Owner’s capital
• D. None of these

Hint:

Shares = ownership; Debentures = borrowings/loan capital.

Answer 1

The Correct Option is B

Step 1: Nature of debenture.
Debentures are instruments of debt issued by a company to raise funds. They represent the liability of the company towards lenders.
Step 2: Classification.
- Share capital → Owners’ funds. - Debentures → Loan funds (borrowed capital).
Step 3: Term.
Debentures are normally repayable after a long period, hence they are classified as long-term borrowings.
Final Answer: \[ \boxed{\text{Long-term borrowings}} \]