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WAEC Financial Accounting 1996 Question 37

Question 37

Company Accounts

Which of the following is a charge against profit?

  1. A.Ordinary dividend
  2. B.General reserve
  3. C.Preference dividend
  4. D.Debenture interest
  5. E.Revenue reserve.
Show the answer and explanation

Answer: D (Debenture interest)

Explanation

Debenture interest is an expense charged in the profit and loss account; dividends and reserves are appropriations of profit.