Discount on Issue of Debentures

Q.

Name the head under which 'Discount on Issue of Debentures' appears in the Balance Sheet of a company.

Q.

What is discount on issue of debentures?

Q.

Discount on the issue of debentures should be shown on the :

1. Asset side of Balance Sheet

2. As expense in the statement of P&L

3. Equity & Liabilities side of Balance Sheet

4. As Income in the statement of P&L

Q.

What are the criteria for capitalization of fixed assets?

Q.

Loss on issue of debentures is written off :

1. Within 3 years of the issue of debentures

2. In the year of redemption of debentures

3. In the year of the issue of debentures

4. During the life of debentures

Q.

Name the Sources That May Be Available for Redemption of Debentures.

Q.

Name the head under which ‘discount on issue of debentures’ appears in the Balance Sheet of a company.

Q. Provision for discount on debtors is created for_____.

1. Bad debts
2. Good debtor
3. Bad debtor
4. Late payment

Q.

Which account needs to debited for writing off discount on issue of debentures over the span of debentures?

1. Profit and Loss A/c

2. Discount on issue of debentures

3. Securities Premium A/c

4. None of these

Q. What do you mean by provision for discount on debtors?

Q. Write True or False

Retirement of bill means payment of the bill before due date.

Q. Pick the odd one ________.

1. Reserve for discount on creditors is credited to profit & loss account.
2. Provision for discount on creditors is always made.
3. Discount on creditors should be deducted from Sunday creditors in balance sheet.
4. Both A & C.

Q. Which of the following is a part of Financing activities of a business.

1. Discount on issue of Debentures
2. Underwriting Commission
3. All of the above
4. Share selling expenses

Q. Cash discount is not recorded in the books of accounts.

1. True
2. False

Q.

Which account needs to credited for writing off discount on issue of debentures over the span of debentures?

1. Profit and Loss A/c

2. Discount on issue of debentures A/c

3. Securities Premium A/c

4. None of these

Q. What is meant by provision for discount on debtors?

Q. If consignor draws a bill on consignee and discounted it with the banker the discounting charges will be debited in ___________.

1. General P/L
2. Consignment A/c
3. Consignee
4. Debtors

Q. ________will have a normal credit balance?

1. Sales Returns and Allowances
2. Discount received
3. Freight-in
4. Purchases

Q. Discount at the time of retirement of a Bill is a gain for the drawee.

1. True
2. False

Q. Discount on issue of shares is a ___________.

1. Capital loss
2. Revenue loss
3. Trading loss
4. Financial loss

Q. Provision for discount on debtors is ____________.

1. Credited to profit & loss account
2. Credited to trading account
3. Debited to profit & loss account
4. Debited to trading account

Q. When Consignor discounts the bills receivable with bank, then which of the following entry will be passed in the books of Consignor?

A.Consignment A/c Discount A/c To Bills Receivable A/c	Dr. Dr.
A.Bank A/c Profit & Loss A/c To Bills Receivable A/c	Dr. Dr.
C.Bank A/c Consignment A/c To Bills Receivable A/c	Dr. Dr.
D.None of the above.

1. A
2. B
3. C
4. D

Q. While preparing P/L account, rebate on bills discounted to be provided shall be deducted from discount received is ________.

1. Schedule 16
2. Schedule 15
3. Schedule 14
4. Schedule 13

Q. Premium on issue of shares can be used for ________________.

1. Issue of bonus shares
2. Payment of dividends
3. Payment of operating expenses
4. Redemption of debentures

Q. Write True or False

A bill can't be deposited into bank for collection.

Q. A liability of Rs. 7, 004 will be created against bills receivable discounted earlier but now dishonoured. What is the journal entry, effect in Revaluation Account, Partners Capital Account and Balance Sheet?

Q. Discount is given to debtors to encourage _________.

1. None of the Above
2. Bad debts
3. Discount
4. Prompt payments

Q. In Risk-Adjusted Discount Rate method, the discount rate to be used is the normal discount rate as ____________ by the risk factor.

1. Increased
2. Unchanged
3. None of the above
4. Decreased