Question

State whether the following statement is True (T) or False (F):

Loss on issue of debentures account is a revenue loss.

Answer 1

This statement is false.

Explanation:

Loss on issue of debentures (such as discount allowed or premium payable on redemption) is a capital loss, not a revenue loss. This is because issuing debentures is a long-term financing activity that does not occur in the normal, day-to-day operations of the business.