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Question
In Internal reconstruction, the amount sacrificed by shareholders are credited to ______________.
In Internal reconstruction, the amount sacrificed by shareholders are credited to ______________.
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Solution
The correct option is C Capital Reduction account
The Capital Reduction Account represents the sacrifice made by the Shareholders, Debenture-holders, Creditors etc. The appreciation in the value of assets is also credited to this account. This amount available is used to write off accumulated losses, intangible assets, over-valuation of assets, etc.
The Capital Reduction Account represents the sacrifice made by the Shareholders, Debenture-holders, Creditors etc. The appreciation in the value of assets is also credited to this account. This amount available is used to write off accumulated losses, intangible assets, over-valuation of assets, etc.
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