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Home Questions 27DR7BQXU7
Target Exam

CUET

Subject

Accountancy

Chapter

Financial Statements of a Company

Question:

Question consists of two statements, namely, Assertion (A) and Reason (R). Select the correct answer.
Assertion: Borrowing costs such as discount on issue of debentures are required to be written-off completely in the year in which such expenses are incurred.
Reasoning: Total borrowings are categorised into long-term borrowings, short-term borrowings and current maturities to long-term debt as per Schedule III of the Companies. Act, 2013.

Options:

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

Both A and R are incorrect

Assertion (A) is true but Reasoning (R) is not correct.

Assertion (A) is not true but Reasoning (R) is correct.

Correct Answer:

Assertion (A) is not true but Reasoning (R) is correct.

Explanation:

Borrowing costs such as discount on issue of debentures could be written off over loan period.
Total borrowings are categorised into long-term borrowings, short-term borrowings and current maturities to long-term debt as per Schedule III of the Companies Act, 2013.

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