Which of the following does not represent application of fund of a company?

Fixed Asset.

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Goodwill.

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Debentures.

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Repayment of loan.

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Solution

The correct option is C Debentures.
Debenture is like a debt which is a source of fund not the application of fund. If debentures are issued, this will increase the sources. When debenture are paid off, its an application of fund.

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Similar questions

Q. Which of the following items are application of funds?
(1) Material purchased for manufacturing activities.
(2) Loan from financial company.
(3) Redemption of debentures.
(4) Payment of dividend.

The balance amount of debt after exclusion of sinking fund and other assets meant for repayment of loans is called

Which of the following accounts are debited while repayment of a bank loan ?

Under which major head and sub-heads does the following items be placed in the Balance Sheet of a company as per Schedule III, Part I of the Companies Act, 2013.

(i) Cash credit.

(ii) 10 years loan obtained from Financial Institutions.

(iii) Debenture Sinking Fund.

(iv) Matured Debentures.

Assuming that the Debt-Equity Ratio is 2 : I, state, giving reasons, which of the following transactions would (I) Increase; (ii) Decrease; (ii.) Not alter the Debt-Equity Ratio :

(i) Issue of new shares (Preference/Equity) for Cash.

(ii) Issue of new shares (Preference/Equity) against purchase of fixed asset.

(iii) Buy-back of its own shares by a Company.

(iv) Issue of Debentures for Cash.

(v) Issue of Debentures against purchase of fixed asset.

(vi) Repayment of Long-term Borrowings.

(vii) Conversion of Debentures into Equity Shares/Preference Shares.

(viii) Sale of a fixed asset at par.

(ix) Sale of a fixed asset at profit.

(x) Sale of a fixed asset at loss.

(xi) Purchase of a fixed asset on a credit of 2 months.

(xii) Purchase of a fixed asset on long-term deferred payment basis.

(xiii) Issue of Bonus Shares.

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Which of the following does not represent application of fund of a company?

The correct option is C Debentures.Debenture is like a debt which is a source of fund not the application of fund. If debentures are issued, this will increase the sources. When debenture are paid off, its an application of fund.

The correct option is C Debentures.
Debenture is like a debt which is a source of fund not the application of fund. If debentures are issued, this will increase the sources. When debenture are paid off, its an application of fund.