CUET Preparation Today
Interest on debenture is : |
A direct expense A charge against profit An appropriation of profit Paid only when there is profit in the company |
A charge against profit |
The correct answer is Option 2 - a charge against profit Interest on debentures is treated as an expense for the company, and it is deducted from the company's profit to accurately represent its financial performance and to adhere to standard accounting principles. It is charge against profit so it has to be paid to debentureholders whether the company earns profit or not. |
