Question : Which of the following statements is false?
Option 1: Loss on Issue of Debentures is debited at the time of issue of debentures following the Prudence Concept of Accounting.
Option 2: Loss on Issue of Debentures is written off from Securities Premium Reserve, if it exists and thereafter from Statement of Profit and Loss.
Option 3: Loss on Issue of Debentures Account is an Expense Account and Premium on Redemption of Debentures Account is a Liability Account.
Option 4: Premium on Redemption of Debentures Account is credited at the time of payment, i.e., on redemption of debentures.
Correct Answer: Premium on Redemption of Debentures Account is credited at the time of payment, i.e., on redemption of debentures.
Solution : Answer = Premium on Redemption of Debentures Account is credited at the time of payment, i.e., on redemption of debentures.
Discount or Loss on Issue of Debentures is a capital loss for a company, which is written off in the year it is incurred, i.e., in the year the debentures are allotted from: (i) Securities Premium Reserve, if it exists, i.e., has a balance, and (ii) Statement of Profit and Loss. At the time of redemption of Debentures premium on redemption of Debentures A/c is debited.
Question :
R, M and P were partners in a firm. P died on 29th February, 2020. His share of profit from the closure of the last accounting year till the date of death was to be calculated on the basis of the average of three completed years of profits
Question : Which of the following are not the Characteristics of Statement of Profit and Loss (Profit and Loss Account)?
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