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CS Executive · Corporate Accounting and Financial Management · Accounting for Debentures

Bearer debentures differ from registered debentures mainly because bearer debentures:

Bearer debentures pass from one person to another by simple delivery, and the company keeps no record of the holder's name. Registered debentures need a proper transfer and an entry in the register, which is the key difference between the two types.

  1. ACannot carry any interest coupon
  2. BMust always be secured on a fixed asset
  3. CAre transferable by mere delivery and the company holds no register of the holder's nameCorrect
  4. DAre transferable only by a registered transfer deed with the holder's name on the register

Explanation

Bearer debentures are payable to whoever holds them and pass by delivery, so the company does not record the holder's name. Registered debentures need a transfer deed and an entry in the register. The option on registered transfer therefore describes registered debentures, not bearer ones.

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