Debentures are _____.
A)short-term liabilities arising from income transactions
B)debt secured by a claim against specific assets
C)debt secured by a general claim against total assets
D)unearned revenues

Question

Quizplus · Accepted Answer

Debentures are a type of bond that is unsecured, meaning there is no collateral backing the bond. Instead, they are secured by a general claim against the total assets of the issuing company. Therefore, option C is the correct choice. Option A is incorrect because debentures are long-term liabilities, not short-term liabilities. Option B is incorrect because secured debt is backed by specific assets, while debentures are unsecured. Option D is incorrect because debentures are not unearned revenues.

Debentures Are _____