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.
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