Question

Interest on Debentures is ______.

Options

• a charge against profit.

• an appropriation of profits.

• not taken into consideration for calculating taxable income of the company.

• None of the above.

Answer 1

Interest on Debentures is a charge against profit.

Explanation:

Interest on debentures is a fixed finance cost payable whether the company earns profit or not. Hence, it is a charge against profit.