Question

Match List-I(Items) with List-II(Headings) and select the correct answer using the codes given the lists.

List-I(Items)	List-II(Headings)
I. Provision for income tax	(a) Miscellaneous expenses not written off
II. Share premium	(b) Current liabilities
III. Unclaimed dividend	(c) Reserves and surplus
IV. Discount issue of shares	(d) Profit and loss account

• A. I-(d), II-(c), III-(b), IV-(a)
• B. I-(b), II-(c), III-(d), IV-(a)
• C. I-(d), II-(a), III-(b), IV-(c)
• D. I-(a), II-(b), III-(c), IV-(d)

Answer 1

Answer: (A)

I-(d), II-(c), III-(b), IV-(a)

Option A is the correct One.

Usage of Securities Premium Account: Under Section 78 of the Companies Act 2013, Securities Premium Reserve may be used wholly or in part for (a) Issuing fully paid bonus shares to the members. ... It is part of the 'Reserve and Surplus' section of the balance sheet and shows financial health.
Unclaimed dividends are shown under current liability and provisions in the balance sheet of the company since shareholder can claim these dividends any time.

In the balance sheet, 'Discount on Issue of Shares Account' appears on the “Assets” side under the heading 'Miscellaneous Expenditure'. The account represents a fictitious asset and should be gradually written off by transfer to Profit and Loss Account although there is no legal compulsion to do so.

A provision for income taxes is the estimated amount that a business or individual taxpayer expects to pay in income taxes for the current year. The amount of this provision is derived by adjusting the reported net income of a business with a variety of permanent differences and temporary differences.