Question : ‘Discount on issue’ is a ………….. and will be ----------- during the life time of the debentures. But till then it will be shown as --------------’ on the Assets side of the Balance Sheet.
Option 1: Revenue loss, debited, amortized expenditure
Option 2: Capital loss, written off, unamortized expenditure
Option 3: Revenue loss, profit and loss, fixed assets
Option 4: Capital loss, written off, amortized expenses
Correct Answer: Revenue loss, profit and loss, fixed assets
Solution : Answer = Revenue loss, profit and loss, fixed assets
"Discount on issue" is a revenue loss and will be amortized during the lifetime of the debentures. However, until then, it will be shown as "Fixed Assets" on the Assets side of the Balance Sheet. This treatment ensures proper accounting for the discount while reflecting its impact on the company's financial position. Hence, the correct option is 3.
Question : Discount on issue of debenture is a
Question : The nature of a discount on the issuance of debentures is-
Question : The term ‘investment’ is used for ‘Non-Current Investments’. Trade Investments are also treated as ………
Question : KTR Ltd., issued 365, 9% Debentures of Rs. 1,000 each on 4th March, 2016 at 6% discount, redeemable at 5% premium. Loss on issue of Debentures debited/credited with _____________.
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile