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Read the text carefully and answer the questions:
Electronic Follow Pro, a Delhi Based Company dealing the almost all types of electronic products, appointed marketing expert, Mr. Salman Khan as the CEO of the company, with a target to increase their market share from 40% to 50% for the accounting year 2022-23. Mr. Salman discussed the details of target to be achieved with all departmental heads and branch heads of all branches in Delhi. The target is to reach all backward or less developed cities of Delhi NCR, Motto of new Project is “Use More; Save More”. Selling, Distribution and Promotional expenses of the firm will increase manifold. The finance manager Mr. Sharukh was asked to prepare the budget accordingly, an additional fund requirement of Rs. 60,00,000 is to be raised. The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.
Q. Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?
  • a)
    Other Current Liabilities in Balance Sheet
  • b)
    Short term Provisions in Balance Sheet
  • c)
    Other Expenses in Income Statement
  • d)
    Finance Cost in Income Statement
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Read the text carefully and answer the questions: Electronic Follow Pr...
Explanation:

Finance Cost in Income Statement:
- Annual fixed obligations paid on debentures are shown under the head 'Finance Cost' in the Income Statement.
- These costs represent the interest expense incurred by the company on the debentures issued.
- Finance costs are considered as a part of the company's operating expenses and are deducted from the company's revenue to arrive at the net profit.

Importance of Showing in Income Statement:
- Showing finance costs separately in the Income Statement helps in analyzing the company's financial performance accurately.
- It provides transparency regarding the interest expenses incurred by the company, which is crucial for investors and stakeholders to assess the company's financial health.
- It also helps in comparing the company's financial performance with previous years and industry standards.

Impact on Financial Statements:
- By showing the annual fixed obligations paid on debentures under Finance Cost in the Income Statement, it affects the company's bottom line.
- Higher finance costs indicate higher debt levels and interest expenses, which can impact the profitability of the company.
- It is essential for the company to manage its finance costs efficiently to ensure sustainable growth and profitability.
Free Test
Community Answer
Read the text carefully and answer the questions: Electronic Follow Pr...
Interest on debentures is a finance cost in the income statement.
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Read the text carefully and answer the questions: Electronic Follow Pro, a Delhi Based Company dealing the almost all types of electronic products, appointed marketing expert, Mr. Salman Khan as the CEO of the company, with a target to increase their market share from 40% to 50% for the accounting year 2022-23. Mr. Salman discussed the details of target to be achieved with all departmental heads and branch heads of all branches in Delhi. The target is to reach all backward or less developed cities of Delhi NCR, Motto of new Project is “Use More; Save More”. Selling, Distribution and Promotional expenses of the firm will increase manifold. The finance manager Mr. Sharukh was asked to prepare the budget accordingly, an additional fundrequirement of Rs. 60,00,000 is to be raised. The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.Q.Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?a)Other Current Liabilities in Balance Sheetb)Short term Provisions in Balance Sheetc)Other Expenses in Income Statementd)Finance Cost in Income StatementCorrect answer is option 'D'. Can you explain this answer?
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Read the text carefully and answer the questions: Electronic Follow Pro, a Delhi Based Company dealing the almost all types of electronic products, appointed marketing expert, Mr. Salman Khan as the CEO of the company, with a target to increase their market share from 40% to 50% for the accounting year 2022-23. Mr. Salman discussed the details of target to be achieved with all departmental heads and branch heads of all branches in Delhi. The target is to reach all backward or less developed cities of Delhi NCR, Motto of new Project is “Use More; Save More”. Selling, Distribution and Promotional expenses of the firm will increase manifold. The finance manager Mr. Sharukh was asked to prepare the budget accordingly, an additional fundrequirement of Rs. 60,00,000 is to be raised. The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.Q.Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?a)Other Current Liabilities in Balance Sheetb)Short term Provisions in Balance Sheetc)Other Expenses in Income Statementd)Finance Cost in Income StatementCorrect answer is option 'D'. Can you explain this answer? for Humanities/Arts 2024 is part of Humanities/Arts preparation. The Question and answers have been prepared according to the Humanities/Arts exam syllabus. Information about Read the text carefully and answer the questions: Electronic Follow Pro, a Delhi Based Company dealing the almost all types of electronic products, appointed marketing expert, Mr. Salman Khan as the CEO of the company, with a target to increase their market share from 40% to 50% for the accounting year 2022-23. Mr. Salman discussed the details of target to be achieved with all departmental heads and branch heads of all branches in Delhi. The target is to reach all backward or less developed cities of Delhi NCR, Motto of new Project is “Use More; Save More”. Selling, Distribution and Promotional expenses of the firm will increase manifold. The finance manager Mr. Sharukh was asked to prepare the budget accordingly, an additional fundrequirement of Rs. 60,00,000 is to be raised. The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.Q.Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?a)Other Current Liabilities in Balance Sheetb)Short term Provisions in Balance Sheetc)Other Expenses in Income Statementd)Finance Cost in Income StatementCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Humanities/Arts 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the text carefully and answer the questions: Electronic Follow Pro, a Delhi Based Company dealing the almost all types of electronic products, appointed marketing expert, Mr. Salman Khan as the CEO of the company, with a target to increase their market share from 40% to 50% for the accounting year 2022-23. Mr. Salman discussed the details of target to be achieved with all departmental heads and branch heads of all branches in Delhi. The target is to reach all backward or less developed cities of Delhi NCR, Motto of new Project is “Use More; Save More”. Selling, Distribution and Promotional expenses of the firm will increase manifold. The finance manager Mr. Sharukh was asked to prepare the budget accordingly, an additional fundrequirement of Rs. 60,00,000 is to be raised. The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.Q.Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?a)Other Current Liabilities in Balance Sheetb)Short term Provisions in Balance Sheetc)Other Expenses in Income Statementd)Finance Cost in Income StatementCorrect answer is option 'D'. Can you explain this answer?.
Solutions for Read the text carefully and answer the questions: Electronic Follow Pro, a Delhi Based Company dealing the almost all types of electronic products, appointed marketing expert, Mr. Salman Khan as the CEO of the company, with a target to increase their market share from 40% to 50% for the accounting year 2022-23. Mr. Salman discussed the details of target to be achieved with all departmental heads and branch heads of all branches in Delhi. The target is to reach all backward or less developed cities of Delhi NCR, Motto of new Project is “Use More; Save More”. Selling, Distribution and Promotional expenses of the firm will increase manifold. The finance manager Mr. Sharukh was asked to prepare the budget accordingly, an additional fundrequirement of Rs. 60,00,000 is to be raised. The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.Q.Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?a)Other Current Liabilities in Balance Sheetb)Short term Provisions in Balance Sheetc)Other Expenses in Income Statementd)Finance Cost in Income StatementCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Humanities/Arts. Download more important topics, notes, lectures and mock test series for Humanities/Arts Exam by signing up for free.
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The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.Q.Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?a)Other Current Liabilities in Balance Sheetb)Short term Provisions in Balance Sheetc)Other Expenses in Income Statementd)Finance Cost in Income StatementCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. 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The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.Q.Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?a)Other Current Liabilities in Balance Sheetb)Short term Provisions in Balance Sheetc)Other Expenses in Income Statementd)Finance Cost in Income StatementCorrect answer is option 'D'. 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The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.Q.Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?a)Other Current Liabilities in Balance Sheetb)Short term Provisions in Balance Sheetc)Other Expenses in Income Statementd)Finance Cost in Income StatementCorrect answer is option 'D'. 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The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.Q.Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?a)Other Current Liabilities in Balance Sheetb)Short term Provisions in Balance Sheetc)Other Expenses in Income Statementd)Finance Cost in Income StatementCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Read the text carefully and answer the questions: Electronic Follow Pro, a Delhi Based Company dealing the almost all types of electronic products, appointed marketing expert, Mr. Salman Khan as the CEO of the company, with a target to increase their market share from 40% to 50% for the accounting year 2022-23. Mr. Salman discussed the details of target to be achieved with all departmental heads and branch heads of all branches in Delhi. The target is to reach all backward or less developed cities of Delhi NCR, Motto of new Project is “Use More; Save More”. Selling, Distribution and Promotional expenses of the firm will increase manifold. The finance manager Mr. Sharukh was asked to prepare the budget accordingly, an additional fundrequirement of Rs. 60,00,000 is to be raised. The Finance Manager Mr. Sharukh proposed to (i) issue equity shares of Rs. 100 each for Rs. 20,00,000 (ii) 20,000 10% debentures of Rs. 100 each to the public at a premium of 5%; redeemable after 5 years at Rs. 110 per debenture. (iii) Raise a loan of Rs. 20,00,000 from Bank of India against debenture kept as an additional security.Q.Under what head sub-head will this annual fixed obligation paid on debentures be shown in companies financial statements?a)Other Current Liabilities in Balance Sheetb)Short term Provisions in Balance Sheetc)Other Expenses in Income Statementd)Finance Cost in Income StatementCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice Humanities/Arts tests.
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