CUET UG Categorised PYQ Accountancy Unit 6 -

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CUET UG Categorised PYQ Accountancy Unit 6

Accountancy

⏱️ 30 Minutes

❓ 15 Questions

📅 2022, 2023, 2024 & 2025

✍️ Long Answers

📌 Answers are locked once submitted — results and explanations appear at the end.

CUET UG Categorised PYQ Accountancy Unit 6

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QUESTION 1 OF 15

Question:
Match List I with List II:

LIST I	LIST II
A. Tenure	I. Zero coupon rate
B. Interest rate point of view	II. Irredeemable
C. Security	III. Registration
D. Bearer	IV. Secured

Answer Review

1 Question:
Match List I with List II:

LIST I	LIST II
A. Tenure	I. Zero coupon rate
B. Interest rate point of view	II. Irredeemable
C. Security	III. Registration
D. Bearer	IV. Secured

A A-I, B-III, C-II, D-IV

B A-IV, B-I, C-III, D-II

C A-II, B-I, C-IV, D-III

D A-III, B-IV, C-I, D-II

💡 Short Explanation

Tenure relates to the period/redemption (Irredeemable). Interest rate relates to the coupon (Zero coupon). Security relates to the charge on assets (Secured). Bearer/Registration relates to the mode of transfer.

✅ Correct Answer Explanation

(Detailed) • A-II (Tenure): Relates to the time of repayment. Irredeemable debentures are those not repayable during the lifetime of the company. • B-I (Interest Rate): Zero coupon rate debentures do not carry a specific rate of interest; the interest is the difference between issue price and face value. • C-IV (Security): Secured debentures are those protected by a charge on the assets of the company. • D-III (Bearer/Registration): Registered debentures are recorded in the company's books, whereas Bearer debentures are transferable by mere delivery.

❓ Why Other Options Are Incorrect

A) A-I, B-III, C-II, D-IV
Incorrectly matches Tenure with Interest (Zero coupon) and Security with Irredeemable.
B) A-IV, B-I, C-III, D-II
Incorrectly matches Tenure with Security (Secured).
D) A-III, B-IV, C-I, D-II
Incorrectly matches Tenure with Registration.

🎯 Strategy

Used

Option Grouping

Option A → Tenure-I is wrong.
Option B → Tenure-IV is wrong.
Option C → All pairs (A-II, B-I, C-IV, D-III) are logically consistent.

Final Answer → C

🧠 Memory Trick

I-I: Interest matches I (Zero coupon rate).

📚 Class XII, Accountancy Part II, Chapter 2: Issue and Redemption of Debentures, Section: Types of Debentures.

2 Question:
Calculate the amount of yearly interest payable on 9% debentures (10,000 debentures of ₹100) issued as collateral security. (PYQ 2022)

A No Interest payable

B ₹9,000

C ₹99,000

D ₹90,000

💡 Short Explanation

Collateral security is a secondary/parallel security. No interest is paid on these debentures. Interest is only paid on the primary loan taken.

✅ Correct Answer Explanation

(Detailed) Debentures issued as collateral security are not "active" in the sense of debt. They are only held by the lender as a guarantee. The company pays interest only on the actual loan amount borrowed. The 9% mention is merely a description of the debenture's face value and terms should they ever be officially "issued" (activated) due to a default on the primary loan. Until such default occurs, no interest is due on collateral debentures.

❓ Why Other Options Are Incorrect

B) ₹9,000
An incorrect calculation.
C) ₹99,000
Arithmetic error.
D) ₹90,000
This is the calculation of interest (10,000 × 100 × 9% = ₹90,000) if the debentures were issued for cash, but ignores the "collateral" status.

🎯 Strategy

Used

Extreme Word Filter

Option A → Highlights the unique legal status of "Collateral."
Option D → The "trap" answer for those who ignore the word "collateral."

Final Answer → A

🧠 Memory Trick

Security is Silent: Collateral security stays "silent" (no interest) unless the main loan "screams" (defaults).

📚 Class XII, Accountancy Part II, Chapter 2: Issue and Redemption of Debentures, Section: Issue of Debentures as Collateral Security.

3 Question:
Romi Ltd. purchased building worth ₹1,50,000, machinery worth ₹1,40,000 and furniture worth ₹10,000 from XYZ Co. and took over its liabilities of ₹20,000 for a purchase consideration of ₹3,15,000. They paid the purchase consideration by issuing 12% debentures of ₹100 each at a premium of 5%.
What will be the number of debentures issued by Romi Ltd.? (PYQ 2022)

A 4,000

B 3,500

C 3,000

D 2,000

💡 Short Explanation

Purchase Consideration: ₹3,15,000. Issue Price per Debenture: ₹100 (Face Value) + ₹5 (Premium) = ₹105. Formula: Purchase Consideration ÷ Issue Price = Number of Debentures.

✅ Correct Answer Explanation

(Detailed) The number of debentures to be issued is calculated by dividing the total amount payable (Purchase Consideration) by the issue price of a single debenture. Issue Price = ₹100 + 5% of ₹100 = ₹105 Number of Debentures = ₹3,15,000 ÷ ₹105 = 3,000 Debentures Note: The values of assets and liabilities are used to calculate Goodwill or Capital Reserve, but the number of debentures depends solely on the agreed Purchase Consideration.

❓ Why Other Options Are Incorrect

A) 4,000
This would result if the issue price was ₹78.75, which is incorrect.
B) 3,500
Incorrect arithmetic calculation.
D) 2,000
This would result if the issue price was much higher (₹157.50).

🎯 Strategy

Used

Substitution
Step 1 → Identify Purchase Consideration (₹3,15,000).
Step 2 → Determine Issue Price (₹100 + ₹5 = ₹105).
Step 3 → Divide: ₹3,15,000 ÷ ₹105 = 3,000.
Final Answer → C

🧠 Memory Trick

P.C. ÷ I.P. = Purchase Consideration divided by Issue Price gives you the quantity.

📚 Class XII, Accountancy Part II, Chapter 2: Issue and Redemption of Debentures, Section: Issue of Debentures for Consideration other than Cash.

4 Question:
What are different types of debentures from the view point of registration:
A. Convertible
B. Bearer
C. Redeemable
D. Secured
E. Registered
Choose the correct answer from the options given below: (PYQ 2022)

A A & E only

B B & C only

C B & E only

D C & D only

💡 Short Explanation

Classification by Registration: Registered and Bearer. Classification by Security: Secured and Unsecured. Classification by Redemption: Redeemable and Irredeemable. Classification by Convertibility: Convertible and Non-convertible.

✅ Correct Answer Explanation

(Detailed) From the viewpoint of Registration, debentures are classified based on whether the company maintains a record of the holder: • Registered Debentures (E): These are recorded in the Register of Debenture Holders. Transfer requires a formal deed. • Bearer Debentures (B): These are not recorded. They are transferable by mere delivery, and interest is paid to whoever produces the coupon.

❓ Why Other Options Are Incorrect

A) A & E only
Convertible (A) is from the viewpoint of Convertibility.
B) B & C only
Redeemable (C) is from the viewpoint of Redemption.
D) C & D only
Secured (D) is from the viewpoint of Security.

🎯 Strategy

Used

Option Grouping
A → Convertibility.
B → Registration.
C → Redemption.
D → Security.
E → Registration.
Final Answer → B & E (Option C).

🧠 Memory Trick

R-B Registration: Registered or Bearer.

📚 Class XII, Accountancy Part II, Chapter 2: Issue and Redemption of Debentures, Section: Types of Debentures.

5 Question:
When debentures are issued at premium with the term of redeeming them at par. The amount of premium received at the time of issue will be: (PYQ 2022)

A Debited to Premium on Redemption of Debenture A/C

B Credited to Premium on Redemption of Debentures A/C

C Debited to Securities Premium Reserve A/C

D Credited to Securities Premium Reserve A/C

💡 Short Explanation

Premium on issue is a capital gain for the company. Gains are always credited according to nominal account rules. The specific account used for share/debenture premium is Securities Premium Reserve (SPR).

✅ Correct Answer Explanation

(Detailed) When a company issues debentures at a price higher than the face value, the excess amount is called "Securities Premium." This is a capital profit. Under the double-entry system, all incomes and gains are credited. Since the debentures are being redeemed at par (face value), there is no loss on redemption to provide for. Therefore, we simply credit the Securities Premium Reserve A/C at the time of allotment.

❓ Why Other Options Are Incorrect

A) Debited to Premium on Redemption of Debenture A/C
This account is used only when there is a loss due to redemption at a premium, and it is usually a liability (Credit).
B) Credited to Premium on Redemption of Debentures A/C
This account is credited only when debentures are to be redeemed at a premium (an extra liability), not when they are issued at a premium.
C) Debited to Securities Premium Reserve A/C
This would imply a reduction in the reserve, but the issue actually creates/increases the reserve.

🎯 Strategy

Used

Contextual/Tonal Matching
Issue at Premium → Gain for Firm → Credit SPR.
Redemption at Par → No extra cost → Ignore "Premium on Redemption" accounts.
Final Answer → D

🧠 Memory Trick

I-P-C: Issue Premium is always a Credit to SPR.

📚 Formatted exactly in your required structure (Questions 6–10):

6 Question:
Data Ltd. purchased assets of the book value ₹4,00,000 and took over the liability of ₹50,000 from Sona Ltd. It was agreed that purchase consideration will be settled by cheque of ₹1,00,000 and by issue of ₹2,00,000, 10% debentures at premium of 25%.
The Amount of goodwill/capital reserve will be (PYQ 2023)

A ₹30,000 Capital reserve

B ₹30,000 goodwill

C ₹50,000 Capital reserve

D There will not be any Goodwill or Capital Reserve

💡 Short Explanation

Net Assets = Assets − Liabilities. Purchase Consideration = Total value paid. If Net Assets = Purchase Consideration, neither Goodwill nor Capital Reserve arises.

✅ Correct Answer Explanation

(Detailed) Step 1: Calculate Net Assets Acquired Assets = ₹4,00,000 Less: Liabilities = ₹50,000 Net Assets = ₹3,50,000 Step 2: Calculate Purchase Consideration Cheque = ₹1,00,000 10% Debentures = ₹2,00,000 Premium on Debentures (25%) = ₹2,00,000 × 25% = ₹50,000 Purchase Consideration = ₹1,00,000 + ₹2,00,000 + ₹50,000 = ₹3,50,000 Since: Net Assets = ₹3,50,000 Purchase Consideration = ₹3,50,000 Therefore, there will not be any Goodwill or Capital Reserve.

❓ Why Other Options Are Incorrect

A) ₹30,000 Capital Reserve
Capital Reserve arises only when Net Assets exceed Purchase Consideration.
B) ₹30,000 Goodwill
Goodwill arises only when Purchase Consideration exceeds Net Assets.
C) ₹50,000 Capital Reserve
Ignores premium included in Purchase Consideration.

🎯 Strategy

Used

Dimensional Analysis
Net Assets = ₹3,50,000
Purchase Consideration = ₹3,50,000
Difference = Zero

🧠 Memory Trick

Net Assets = Purchase Consideration → No Goodwill, No Capital Reserve

📚 Class 12, Accountancy Part 2, Chapter 2: Issue and Redemption of Debentures.

7 Question:
Company issues 10,000, 12% debentures of ₹100 each at par, redeemable at premium of 5% after 5 years. At the time of allotment, journal Entry will be: (PYQ 2023)
To Debenture Application and Allotment A/c ₹10,00,000
To Premium on Redemption of Debentures A/c ₹50,000
To Debenture Application and Allotment A/c ₹10,12,000
To Debenture Application and Allotment A/c ₹10,70,000
Loss on Issue of Debenture Dr ₹50,000
To 12% Debenture A/c ₹10,00,000
To Premium on Redemption of Debentures A/c ₹50,000

A Bank A/c Dr ₹10,50,000 To Debenture Application and Allotment A/c ₹10,00,000 To Premium on Redemption of Debentures A/c ₹50,000

B Bank A/c Dr ₹10,12,000 To Debenture Application and Allotment A/c ₹10,12,000

C Bank A/c Dr ₹10,70,000 To Debenture Application and Allotment A/c ₹10,70,000

D Debenture Application and Allotment A/c Dr ₹10,00,000 Loss on Issue of Debenture Dr ₹50,000 To 12% Debenture A/c ₹10,00,000 To Premium on Redemption of Debentures A/c ₹50,000

💡 Short Explanation

Debentures issued at par. Redeemable at premium. Future redemption premium is treated as Loss on Issue.

✅ Correct Answer Explanation

(Detailed) Issue Amount = 10,000 × ₹100 = ₹10,00,000 Premium on Redemption = 5% × ₹10,00,000 = ₹50,000 Entry: Debenture Application & Allotment A/c Dr ₹10,00,000 Loss on Issue of Debentures Dr ₹50,000 To 12% Debentures A/c ₹10,00,000 To Premium on Redemption of Debentures A/c ₹50,000 Therefore, Option D is correct.

❓ Why Other Options Are Incorrect

A) Incorrectly debits Bank with redemption premium.
B) Treats interest rate as issue amount.
C) Unsupported amount.

🎯 Strategy

Used

Journal Structure Analysis
Issue at Par + Redemption at Premium → Loss on Issue + Premium on Redemption

🧠 Memory Trick

Redemption Premium = Loss on Issue

📚 Class 12, Accountancy Part 2, Chapter 2: Issue and Redemption of Debentures.

8 Question:
Debentures can be redeemed in following ways except:- (PYQ 2023)

A Payments in instalments

B Purchase in open market

C Payment in lump sum

D Payment in fixed asset

💡 Short Explanation

Redemption means repayment of debt. Standard methods involve cash or conversion. Payment through fixed assets is not a recognized method.

✅ Correct Answer Explanation

(Detailed) Recognized methods of redemption include: • Lump Sum Payment • Instalment Redemption • Purchase in Open Market • Conversion into Shares/Debentures Payment through fixed assets is not a standard redemption method. Therefore, Option D is correct.

❓ Why Other Options Are Incorrect

A) Valid redemption method.
B) Valid redemption method.
C) Valid redemption method.

🎯 Strategy

Used

Odd One Out
Three are recognized methods.
One is not.

🧠 Memory Trick

LIPC = Lump Sum – Instalments – Purchase – Conversion

📚 Class 12, Accountancy Part 2, Chapter 2: Issue and Redemption of Debentures.

9 Question:
Identify the correct sequence in the context of issue and redemption of debentures:
A. Creation of Debenture Redemption Reserve
B. Issue of Debentures
C. Redemption of Debentures
D. Investment in specified securities
E. Sale of specified securities
(PYQ 2023)

A B, A, D, E, C

B A, B, D, E, C

C B, D, A, E, C

D D, B, A, E, C

💡 Short Explanation

Debentures are issued first. DRR is created out of profits. Funds are invested in specified securities. Securities are sold when redemption is due. Debentures are redeemed last.

✅ Correct Answer Explanation

(Detailed) The logical sequence followed in redemption of debentures is: B – Issue of Debentures A – Creation of Debenture Redemption Reserve (DRR) D – Investment in Specified Securities / Debenture Redemption Investment E – Sale of Specified Securities at the time of redemption C – Redemption of Debentures Therefore, the correct sequence is: B → A → D → E → C

❓ Why Other Options Are Incorrect

B) A, B, D, E, C
DRR cannot be created before debentures are issued.
C) B, D, A, E, C
Investment is made after creation of DRR, not before.
D) D, B, A, E, C
Investments cannot exist before issue of debentures.

🎯 Strategy

Used

Chronological Sequencing
Issue → Reserve → Investment → Sale → Redemption

🧠 Memory Trick

Issue → Reserve → Investment → Sale → Redemption

📚 Class 12, Accountancy Part II, Chapter 2: Issue and Redemption of Debentures, Section: Redemption of Debentures.

10 Question:
Debenture Redemption Reserve is created by:-
A. Service Sector Company
B. Manufacturing Company
C. Banking Company
D. Automobile Company
E. NBFC's registered with RBI
Choose the correct answer from the options given below: (PYQ 2023)

A A, C and E only

B A, B and D only

C A, B and E only

D B, C and D only

💡 Short Explanation

Banks and RBI-registered NBFCs are exempt. Service, Manufacturing and Automobile companies create DRR.

✅ Correct Answer Explanation

(Detailed) As per Companies (Share Capital and Debentures) Rules: DRR is required for: • Service Sector Companies (A) • Manufacturing Companies (B) • Automobile Companies (D) DRR is not required for: • Banking Companies (C) • RBI Registered NBFCs (E) Hence: A, B and D only.

❓ Why Other Options Are Incorrect

A) Includes Banking Companies and NBFCs.
C) Includes NBFCs.
D) Includes Banking Companies.

🎯 Strategy

Used

Elimination
Remove Banks and RBI Registered NBFCs.

🧠 Memory Trick

No DRR for Financial Institutions

📚 Class 12, Accountancy Part 2, Chapter 2: Issue and Redemption of Debentures.

11 Question:
Which of the following regarding issue and redemption of debentures is not possible in general? (PYQ 2023)

A Issue at premium, Redemption at a premium

B Issued at discount, Redemption at discount

C Issued at par, Redemption at a premium

D Issued at discount, Redemption at par

💡 Short Explanation

Debentures may be redeemed at par or premium. Redemption at discount is generally not permitted. Investors expect at least the face value back.

✅ Correct Answer Explanation

(Detailed) A company may issue debentures at par, premium or discount. However, redemption at discount means repaying less than the face value, which is generally not accepted in practice because investors would receive less than the principal amount invested.

❓ Why Other Options Are Incorrect

A) Possible.
C) Common practice.
D) Standard borrowing arrangement.

🎯 Strategy

Used

Odd One Out
Redemption must normally be at Par or Premium.
Redemption at Discount stands out as the impossible case.

🧠 Memory Trick

"Redemption = Par or More, Never Less."

📚 Class XII Accountancy Part II – Chapter 5: Issue and Redemption of Debentures.

12 Question:
When debentures are issued at premium and redeemed at premium, the journal entry will have the following combination:
(PYQ 2024)

A (A), (B) and (D) only

B (A), (B) and (C) only

C (A), (B), (C) and (D)

D (B), (C) and (D) only

💡 Short Explanation

Premium on issue creates Securities Premium. Premium on redemption creates future liability. Loss on Issue is debited.

✅ Correct Answer Explanation

(Detailed) → Loss on Issue of Debentures is debited. → Securities Premium is credited. → Premium on Redemption of Debentures is credited. → Discount on Issue does not arise because issue is at premium.

❓ Why Other Options Are Incorrect

Options A, B and C include Discount on Issue of Debentures, which is not applicable when debentures are issued at premium.

🎯 Strategy

Used

Elimination
Premium and Discount cannot exist together.
Eliminate all options containing Discount on Issue.
Final Answer → D.

🧠 Memory Trick

Premium Issue + Premium Redemption = Triple Entry.

📚 Class 12, Accountancy Part-II, Chapter 2: Issue and Redemption of Debentures.

13 Question:
Arrange the following in the correct sequence in the context of debenture.
(PYQ 2024)

A (A), (B), (C), (D)

B (A), (C), (B), (D)

C (B), (A), (D), (C)

D (C), (B), (D), (A)

💡 Short Explanation

Debentures are first issued. DRR is created before redemption. Payment is made after redemption becomes due.

✅ Correct Answer Explanation

(Detailed) → Issue of Debentures → Creation of DRR → Redemption becomes Due → Payment to Debenture-holders

❓ Why Other Options Are Incorrect

A) Payment cannot occur before issue.
B) Payment cannot occur before redemption becomes due.
C) Debentures must be issued before any other step.

🎯 Strategy

Used

Elimination
Issue must be first.
Payment must be last.
Only Option D satisfies both conditions.
Final Answer → D.

🧠 Memory Trick

I-R-D-P: Issue → Reserve → Due → Payment.

📚 Class 12, Accountancy Part-II, Chapter 2: Issue and Redemption of Debentures.

14 Question:
If debentures are issued to a vendor for assets purchased and the vendor's account is credited by ₹1,10,000, what is the journal entry if the debentures are issued at a premium of 10%? (PYQ 2025)
To Debentures A/c ₹90,000;
To Securities Premium Reserve A/c ₹10,000
To Debentures A/c ₹1,00,000;
To Securities Premium Reserve A/c ₹10,000
To Debentures A/c ₹1,10,000
To Debentures A/c ₹1,10,000;
To Securities Premium Reserve A/c ₹10,000

A Vendor’s A/c Dr. ₹1,00,000; To Debentures A/c ₹90,000; To Securities Premium Reserve A/c ₹10,000

B Vendor’s A/c Dr. ₹1,10,000; To Debentures A/c ₹1,00,000; To Securities Premium Reserve A/c ₹10,000

C Vendor’s A/c Dr. ₹1,10,000; To Debentures A/c ₹1,10,000

D Vendor’s A/c Dr. ₹1,20,000; To Debentures A/c ₹1,10,000; To Securities Premium Reserve A/c ₹10,000

💡 Short Explanation

Total due to vendor is ₹1,10,000. Number of debentures = Amount Due ÷ (Face Value + Premium). Premium is calculated on the nominal (face) value.

✅ Correct Answer Explanation

(Detailed) Amount due to Vendor: ₹1,10,000. Issue Price: Assume Face Value is ₹100. Premium (10%) = ₹10. Total Issue Price = ₹110. Number of Debentures: ₹1,10,000 ÷ ₹110 = 1,000 debentures. Face Value to Debentures A/c: 1,000 × ₹100 = ₹1,00,000. Premium to SPR A/c: 1,000 × ₹10 = ₹10,000. The entry must debit the Vendor for the full amount (₹1,10,000) to close their account.

❓ Why Other Options Are Incorrect

A) Vendor's A/c Dr. ₹1,00,000...
Incorrect. The vendor was credited ₹1,10,000 originally; debiting only ₹1,00,000 leaves the account unbalanced.
C) Vendor's A/c Dr. ₹1,10,000; To Debentures A/c ₹1,10,000
Incorrect. This would be correct only if issued at par.
It ignores the 10% premium.
D) Vendor's A/c Dr. ₹1,20,000...
Incorrect. This overpays the vendor and uses an incorrect total.

🎯 Strategy

Used

Dimensional/Unit Analysis
Vendor Balance: Must be ₹1,10,000 (Eliminates A and D).
Premium: Must be present as per question (Eliminates C).
Final Answer: (B) matches the math and the accounting logic.

🧠 Memory Trick

Put the nominal value in the Debenture account and the extra in SPR.

📚 Class 12, Accountancy Part-II, Chapter 2: Issue and Redemption of Debentures (Section: Issue of Debentures for Consideration other than Cash).

15 Question:
The Debentures that are payable on the expiry of the specific period either in lumpsum or in instalments during life time of the company are called: (PYQ 2025)

A Secured Debentures

B Redeemable Debentures

C Perpetual Debentures

D Specific Coupon Rate Debentures

💡 Short Explanation

Redemption means repayment. These debentures have a fixed maturity date. They are the most common type of debentures issued by companies.

✅ Correct Answer Explanation

(Detailed) Redeemable Debentures are those that are issued with a specific date or condition for repayment. The company is legally obligated to return the principal amount to the debenture holders either at the end of a fixed term or in installments. This distinguishes them from "Irredeemable" or "Perpetual" debentures, which are only repayable upon the winding up of the company.

❓ Why Other Options Are Incorrect

A) Secured Debentures
Incorrect. This refers to debentures backed by a charge on the company's assets (security), not the timing of repayment.
C) Perpetual Debentures
Incorrect. These are "Irredeemable" debentures that have no fixed date for repayment during the company's existence.
D) Specific Coupon Rate Debentures
Incorrect. This refers to the interest rate (coupon) attached to the debenture, not its repayment schedule.

🎯 Strategy

Used

Elimination
Secured = Security.
Perpetual = Never-ending.
Redeemable = Repayable.
Final Answer → (B) matches the definition of "payable on expiry."

🧠 Memory Trick

"Redeem = Redeem your cash back."

📚 Class 12, Accountancy Part-II, Chapter 2: Issue and Redemption of Debentures (Section: Types of Debentures)

CUET UG Categorised PYQ Accountancy Unit 6

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