The amount of security premium cannot be

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Target Exam

CUET

Subject

Accountancy Part A

Chapter

Accounting for Shares

Question:

The amount of security premium cannot be used for:

Options:

Issuing fully paid bonus shares to the extent not exceeding unissued share capital of the company.

Buy-back of own shares.

Paying premium on the redemption of preference shares or debentures of the company.

Purchase of assets of the company.

Correct Answer:

Purchase of assets of the company.

Explanation:

The correct answer is Option (4) →

Purchase of assets of the company.