Day: May 17, 2020

In the accounts of a limited company. debenture interest paid during the current accounting period, in respect of the same period . . .?

Select ONE answer:

1. is part of the company’s cost of sales.
2. is an expense.
3. is an appropriation of profit.
4. None of the above.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – Debenture interest paid during the current accounting period, in respect of the same period is an expense, and. just like any other expense, is charged as an expense in the profit and loss account (in accordance with the accruals concept).
3. Not correct
4. Not correct

 

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