Question

The balance of Securities Premium Account can be utilized _______________________.

• A. To issue fully paid bonus shares to creditors.
• B. To write off development expenditure.
• C. To provide for the premium payable on the buy-back of equity shares.
• D. None of the above

Answer 1

The correct option is D None of the above

The account can only be used for such specific purposes and no other purpose. To issue fully paid-up bonus shares to its existing shareholders. The balance canalso be used to provide for the premium that is payable on the redemption of debentures or of preference shares of the company.