Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Financial Statements of a Company

Question:
'Discount on issue of debentures' is considered which type of cost while preparing financial statements of the company?
Options:
Finance Cost
Borrowing Cost
Depreciation Cost
Either option 1 or 3
Correct Answer:
Borrowing Cost
Explanation:
Borrowing costs such as discount on issue of debentures should be written-off in the same year in which debuntures are issued.