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 Profits Account
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Solution
The correct option is B Securities Premium Account
Securities Premium Account:-
When shares are issued at an amount more than the nominal value or par value, it is called shares issued at premium. The premium amount thus received is credited to a separate account called ‘Securities Premium Account’ and is shown on the liabilities side of the company’s balance sheet under the head ‘Reserves and Surpluses’.