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Question
On issue of shares Premium is ______.
Options
Profit
Income
Revenue Receipt
Capital Profit
MCQ
Fill in the Blanks
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Solution
On issue of shares Premium is Capital Profit.
Explanation:
When shares are issued at a price above their face value, the excess (premium) received is called Securities Premium. It is not treated as normal business income or revenue receipt; instead, it is a capital profit because it arises from a capital transaction.
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Chapter 6: Company Accounts - Issue of Shares - OBJECTIVE TYPE QUESTIONS [Page 6.201]
