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Loss on issue of debentures is generally written off in:
- a)5 years
- b)10 years
- c)15 years
- d)Over the period of redemption
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Loss on issue of debentures is generally written off in:a)5 yearsb)10 ...
Explanation:
Loss on issue of debentures is generally written off over the period of redemption. Here's a detailed explanation:
What is loss on issue of debentures?
- When a company issues debentures at a discount or a premium, there may be a loss incurred. This loss arises due to the difference between the face value of the debentures and the amount received from their issue.
Writing off the loss:
- The loss on issue of debentures is typically written off over the period of redemption. This means that the total loss is distributed and charged to the profit and loss account over the period for which the debentures are outstanding.
Reason for writing off over the period of redemption:
- Writing off the loss over the period of redemption allows the company to spread out the impact of the loss on its financial statements. It ensures that the company's profitability is not significantly affected in a single accounting period.
Impact on financial statements:
- By writing off the loss over the period of redemption, the company's profit and loss account reflects a more accurate representation of its financial performance. It also ensures that the company's financial statements comply with accounting standards.
Conclusion:
- In conclusion, the loss on issue of debentures is generally written off over the period of redemption to distribute the impact of the loss on the company's financial statements and ensure accurate financial reporting.
Loss on issue of debentures is generally written off over the period of redemption. Here's a detailed explanation:
What is loss on issue of debentures?
- When a company issues debentures at a discount or a premium, there may be a loss incurred. This loss arises due to the difference between the face value of the debentures and the amount received from their issue.
Writing off the loss:
- The loss on issue of debentures is typically written off over the period of redemption. This means that the total loss is distributed and charged to the profit and loss account over the period for which the debentures are outstanding.
Reason for writing off over the period of redemption:
- Writing off the loss over the period of redemption allows the company to spread out the impact of the loss on its financial statements. It ensures that the company's profitability is not significantly affected in a single accounting period.
Impact on financial statements:
- By writing off the loss over the period of redemption, the company's profit and loss account reflects a more accurate representation of its financial performance. It also ensures that the company's financial statements comply with accounting standards.
Conclusion:
- In conclusion, the loss on issue of debentures is generally written off over the period of redemption to distribute the impact of the loss on the company's financial statements and ensure accurate financial reporting.
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Loss on issue of debentures is generally written off in:a)5 yearsb)10 yearsc)15 yearsd)Over the period of redemptionCorrect answer is option 'D'. Can you explain this answer?
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Loss on issue of debentures is generally written off in:a)5 yearsb)10 yearsc)15 yearsd)Over the period of redemptionCorrect answer is option 'D'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Loss on issue of debentures is generally written off in:a)5 yearsb)10 yearsc)15 yearsd)Over the period of redemptionCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Loss on issue of debentures is generally written off in:a)5 yearsb)10 yearsc)15 yearsd)Over the period of redemptionCorrect answer is option 'D'. Can you explain this answer?.
Loss on issue of debentures is generally written off in:a)5 yearsb)10 yearsc)15 yearsd)Over the period of redemptionCorrect answer is option 'D'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Loss on issue of debentures is generally written off in:a)5 yearsb)10 yearsc)15 yearsd)Over the period of redemptionCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Loss on issue of debentures is generally written off in:a)5 yearsb)10 yearsc)15 yearsd)Over the period of redemptionCorrect answer is option 'D'. Can you explain this answer?.
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