Practicing Success
_________ can be used to write off preliminary expenses of the company. |
Capital Reserve Revaluation Reserve General Reserve Securities Premium Reserve |
Securities Premium Reserve |
The correct answer is Option (4) - Securities Premium Reserve. The premium amount is credited to a separate account called ‘Securities Premium Account’ and is shown under the title ‘Equity and Liabilities’ of the company’s balance sheet under the head ‘Reserves and Surpluses’. It can be used only for the following five purposes: |