Unless written off the loss on issue of debentures is shown:

[amp_mcq option1=”On the assets side of Balance Sheet” option2=”On the debit side of Profit and Loss Account” option3=”By way of deduction from the amount of debentures” option4=”On the liabilities side of Balance Sheet” correct=”option3″]

The correct answer is: C. By way of deduction from the amount of debentures.

A loss on issue of debentures is a loss that a company incurs when it issues debentures at a price lower than their face value. This loss is usually shown as a deduction from the amount of debentures in the company’s balance sheet.

The other options are incorrect because:

• Option A is incorrect because the loss on issue of debentures is not an asset.
• Option B is incorrect because the loss on issue of debentures is not an expense.
• Option D is incorrect because the loss on issue of debentures is not a liability.