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Question
Premium received on the issue of shares is shown on the ______ side of the Balance Sheet.
Options
Assets
Equity & Liabilities
MCQ
Fill in the Blanks
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Solution
Premium received on the issue of shares is shown on the Equity & Liabilities side of the Balance Sheet.
Explanation:
Premium received on the issue of shares is not an income but a capital profit, so it is shown on the Equity & Liabilities side of the Balance Sheet. It appears under “Reserves and Surplus” as Securities Premium Reserve, and is used only for specific purposes allowed by law.
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