Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Shares

Question:

The balance in the securities premium account can not be used ______?

Options:

To write-off the expenses of preliminary expenses of the company

To issue fully paid bonus shares

To pay off the purchase consideration.

To write off discount on issue of debentures.

Correct Answer:

To pay off the purchase consideration.

Explanation:

The correct answer is Option (3) → To pay off the purchase consideration.