Interest paid on debentures is shown in ________________.

The Profit and Loss Account

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The Profit and Loss (appropriation) Account

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The Balance Sheet liability side under the heading 'Current Liabilities'

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The Balance sheet by adding to the Debentures account

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Solution

The correct option is D The Profit and Loss Account
Debentures are issued by the company to take a long term debt for the business. Debentures are carrying a fixed rate of interest.
Interest is a charge and an expense for the business. This has to be debited to profit & loss account.

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Similar questions

Q. Select most appropriate alternative from those given below :

The interest on debentures is transferred to __________.
a) Debentures A/c
b) Profit of Loss A/c
c) Balance Sheet
d) Debenture holders A/c

Q. How are the following items shown while preparing Balance Sheet of a company:
(i) Surplus, i.e., Balance in Statement of Profit and Loss (Dr.);
(ii) Interest accrued and due on Debentures;
(iii) Computer Software under development;
(iv) Interest accrued on Investment?

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Accrued income is credited to the profit and loss account and shown in the balance sheet as a current asset. Why?

A Statement of Affairs is similar to the :

(a) Balance sheet
(b) Trial balance
(c) Trading Account
(d) Profit & Loss Account

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Interest paid on debentures is shown in ________________.

The correct option is D The Profit and Loss AccountDebentures are issued by the company to take a long term debt for the business. Debentures are carrying a fixed rate of interest.Interest is a charge and an expense for the business. This has to be debited to profit & loss account.

The correct option is D The Profit and Loss Account
Debentures are issued by the company to take a long term debt for the business. Debentures are carrying a fixed rate of interest.
Interest is a charge and an expense for the business. This has to be debited to profit & loss account.