[amp_mcq option1=”Premium paid on redemption of debentures” option2=”Profit on sale of shares held as stock in trade” option3=”Premium received on issue of shares” option4=”Dividend received on shares held as permanent investment” correct=”option1″]<\/p>\n
The correct answer is A. Premium paid on redemption of debentures.<\/p>\n
A capital profit is a profit that arises from the sale or disposal of a capital asset. Capital assets are assets that are held for long-term use, such as land, buildings, and equipment.<\/p>\n
Premium paid on redemption of debentures is a capital profit because it is a profit that arises from the sale of a capital asset. Debentures are loans that a company makes to investors. When a company redeems its debentures, it pays back the principal amount of the loan plus any interest that has accrued. If the company pays more than the principal amount of the loan, the excess is considered a capital profit.<\/p>\n
The other options are not capital profits because they do not arise from the sale or disposal of a capital asset. Option B, profit on sale of shares held as stock in trade, is a trading profit because it arises from the sale of inventory. Option C, premium received on issue of shares, is a capital receipt because it is a receipt from the issue of shares. Option D, dividend received on shares held as permanent investment, is an income receipt because it is a receipt from the investment of money.<\/p>\n
I hope this explanation is helpful. Please let me know if you have any other questions.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Premium paid on redemption of debentures” option2=”Profit on sale of shares held as stock in trade” option3=”Premium received on issue of shares” option4=”Dividend received on shares held as permanent investment” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-52310","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"\n