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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.
Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false .
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A)...
The ‘discount on debentures’ issuance is noted as a capital loss and is charged to ‘Securities Premium Account’ and is reflected in the asset side as a fictitious asset. Hence, has to be written off during the year of its issue.
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Directions : In the following questions, a statement of Assertion (A)...
Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.
Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, it has to be written off during the years of its issue.
The correct answer is option 'A' - Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Explanation:
To understand the assertion and reason given in the question, let's break it down:
Discount on Debentures:
When a company issues debentures at a price lower than their face value, it is known as a discount on debentures. This discount is given to attract investors and make the debentures more attractive. The discount amount is the difference between the face value and the issue price of the debentures.
Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.
When a company issues debentures at a discount, the discount amount is charged to the Securities Premium Account. The Securities Premium Account represents the premium received by the company on the issuance of shares or debentures. It is a part of the company's reserves and is reflected as an asset in the balance sheet.
Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, it has to be written off during the years of its issue.
The Reason explains that the discount on debentures is noted as a capital loss side as a fictitious asset. This means that the discount is treated as a capital loss for the company. However, the reason also states that it has to be written off during the years of its issue. This implies that the discount on debentures is gradually written off over the years as the debentures mature.
Conclusion:
Both the assertion and reason are true. The discount on debentures is charged to the Securities Premium Account and is reflected as an asset. However, it is important to note that the discount is treated as a capital loss and has to be written off over the years of its issue. Thus, option 'A' is the correct answer.
Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, it has to be written off during the years of its issue.
The correct answer is option 'A' - Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Explanation:
To understand the assertion and reason given in the question, let's break it down:
Discount on Debentures:
When a company issues debentures at a price lower than their face value, it is known as a discount on debentures. This discount is given to attract investors and make the debentures more attractive. The discount amount is the difference between the face value and the issue price of the debentures.
Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.
When a company issues debentures at a discount, the discount amount is charged to the Securities Premium Account. The Securities Premium Account represents the premium received by the company on the issuance of shares or debentures. It is a part of the company's reserves and is reflected as an asset in the balance sheet.
Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, it has to be written off during the years of its issue.
The Reason explains that the discount on debentures is noted as a capital loss side as a fictitious asset. This means that the discount is treated as a capital loss for the company. However, the reason also states that it has to be written off during the years of its issue. This implies that the discount on debentures is gradually written off over the years as the debentures mature.
Conclusion:
Both the assertion and reason are true. The discount on debentures is charged to the Securities Premium Account and is reflected as an asset. However, it is important to note that the discount is treated as a capital loss and has to be written off over the years of its issue. Thus, option 'A' is the correct answer.
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The ‘discount on debentures’ issuance is charged to ‘Securities Premium Account’ and is reflected as an asset.Reason (R): The ‘discount on debentures’ issuance is noted as a capital loss side as a fictitious asset. Hence, has to be written off during the years of its issue.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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