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Authorised Share Capital

The premium o...

Question

The premium on issue of shares must be credited to a separate account called_____.

A

Share Premium Account

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B

Securities Premium Account

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C

Discount on Issue of Shares

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D

Securities Profit Account

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Solution

The correct option is C Securities Premium Account
The share premium account is an equity account found on a company's balance sheet and calculated in a separate account. The amount in the account represents the additional amount shareholders paid for their issued shares that was in excess of the par value of those shares.

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