1
Question
Securities Premiums Account is shown in the balance sheet under _________.
Securities Premiums Account is shown in the balance sheet under _________.
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Solution
The correct option is B Reserves & Surplus
Security Premium Reserve is the additional
amount charged on the face value of any share when the shares are issued, redeemed,
and forfeited
The Companies Act 2013 states that when security
premium has to be recorded in the balance sheet, it done in the Reserve & Surplus mentioned
under the Equity & Liabilities of a company’s balance sheet. It is added only because the premium received by the company is an income for them. Moreover, reserve & surplus head records all those items only which are related to any kind of reserve created by the company for a specific purpose.
Thus, this item is added under the Reserve & Surplus
Security Premium Reserve is the additional
amount charged on the face value of any share when the shares are issued, redeemed,
and forfeited
The Companies Act 2013 states that when security
premium has to be recorded in the balance sheet, it done in the Reserve & Surplus mentioned
under the Equity & Liabilities of a company’s balance sheet. It is added only because the premium received by the company is an income for them. Moreover, reserve & surplus head records all those items only which are related to any kind of reserve created by the company for a specific purpose.
Thus, this item is added under the Reserve & Surplus
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