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Question
From which account, expenses on issue of shares will be written off first of all:
Options
Statement of Profit and Loss
Miscellaneous Expenditure Account
Share Issue Expenses Account
Securities Premium Account
MCQ
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Solution
Securities Premium Account
Explanation:
Share issue expenditures are costs associated with issuing shares, such as prospectus printing, underwriting commissions, broking, etc. These are initially written off against the Securities Premium Reserve (if available) in accordance with the Companies Act of 2013 and accounting treatment. Securities Premiums are written off from the Statement of Profit & Loss if they are not sufficient.
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Chapter 6: Company Accounts - Issue of Shares - OBJECTIVE TYPE QUESTIONS [Page 6.203]
