Issue and Redemption of Debentures · Class 12 · CBSE · Commerce Accountancy
Which account is debited when the company decides to write off 'Discount on Issue of Debentures' or 'Loss on Issue of Debentures'?
Practice question from Issue and Redemption of Debentures (Class 12 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
easy · MCQ · Q-3FC6C1
Which account is debited when the company decides to write off 'Discount on Issue of Debentures' or 'Loss on Issue of Debentures'?
- A.Statement of Profit and Loss only
- B.Capital Reserve or Statement of Profit and Loss
- C.General Reserve or Statement of Profit and Loss
- D.Securities Premium Reserve (if available) or Statement of Profit and LossCorrect answer
Solution
Discount or Loss on issue of debentures can first be written off against Capital Profits like Securities Premium Reserve or Capital Reserve, and the balance (if any) is charged to the Statement of Profit and Loss.
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