Practicing Success
Securities premium reserve can be utilised.............. A. to return excess money received on application |
A, B, C only B, C, E only C, D, E only B, D, E only |
B, D, E only |
When the issue of shares is at a premium, the amount of premium may technically be called at any stage of the issue of shares. However, premium is generally called with the amount due on allotment, sometimes with the application money and rarely with the call money. 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: |