Question

Debentures issued for consideration other than cash includes, debentures :
(A) Issued to bank as additional security
(B) Issued to vendor
(C) Issued to Public
(D) Issued to creditor
(E) Issued for cash
Choose the correct answer from the options given below :

• A. (C), (B), (A) and (E) only
• B. (A), (B) and (D) only
• C. (A), (D) and (C) only
• D. (B), (D) and (A) only

Hint:

Look for options that explicitly relate to payment of the company or bank and other. If they have no cash transaction, they can be considered.

Answer 1

The Correct Option is D

Understanding issue of Debentures Other than for Cash: In the following contexts it has to be identified that Cash should not be related to any item. So we pick only those items that does not relate to cash.
Explanation:
Issued to vendor: Issuing debentures directly to a vendor to purchase assets or services falls under this category.
Issued to creditor: Debentures issued to a creditor for settlement.
Issued to bank as additional security: This is also a way for a company to increase cash and funds, where the cash transactions is done between the bank. % Option (C) Issued to Public and (E) Issued to cash refer to general scenario where shares are directly given.