Multiple choice

Debenture interest

  1. is payable only is case of profit

  2. accumulates in case of loss or inadequate profit

  3. is payable after the payment of preference dividend but before the payment of equity dividend

  4. is payable before the payment of any dividend on shares
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Debenture Interest is payable irrespective of the fact that the company makes profit or loss. It is like any other expense of the company which is to be paid before payment of preference as well as equity dividend.

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