Day: October 9, 2022

A company is considering redeeming its debentures at par at the start of its financial year.

What will be the effect on the company’s profit and net current assets in the year of redemption?

Select ONE answer:

1. Decrease in profit & decrease in net current assets
2. Decrease in profit & increase in net current assets
3. Increase in profit & decrease in net current assets
4. Increase in profit & Increase in net current assets

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 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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