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Securities Premiums Account is shown in the balance sheet under
- a)Reserve & Surplus
- b)Miscellaneous Expenditure
- c)Current Liabilities
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
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Verified Answer
Securities Premiums Account is shown in the balance sheet undera)Reser...
A portion of the surplus almost always results in retained earnings, which has the effect of increasing shareholders' equity. A specific part of the surplus comes from other sources, such as increasing the value of fixed assets carried on the balance sheet, the sale of stock at a premium, or the lowering of the par value on common stock. These "other" sources are frequently called "Capital Surplus" and placed on the balance sheet.
In other words, Capital Surplus tells you how much of the company's shareholders' equity is not due to retained earnings.
Most Upvoted Answer
Securities Premiums Account is shown in the balance sheet undera)Reser...
► Security Premium Reserve is the additional amount charged on the face value of any share when the shares are issued, redeemed, and forfeited.
► The Companies Act 2013 states that when security premium has to be recorded in the balance sheet, it done in the Reserve & Surplus mentioned under the Equity & Liabilities of a company’s balance sheet. It is added only because the premium received by the company is an income for them. Moreover, reserve & surplus head records all those items only which are related to any kind of reserve created by the company for a specific purpose.
► The Companies Act 2013 states that when security premium has to be recorded in the balance sheet, it done in the Reserve & Surplus mentioned under the Equity & Liabilities of a company’s balance sheet. It is added only because the premium received by the company is an income for them. Moreover, reserve & surplus head records all those items only which are related to any kind of reserve created by the company for a specific purpose.
Thus, this item is added under the Reserve & Surplus
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Securities Premiums Account is shown in the balance sheet undera)Reser...
Securities premium account is a nominal account in nature
it is calculated as issued price minus face value
it is calculated as issued price minus face value
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Securities Premiums Account is shown in the balance sheet undera)Reserve & Surplusb)Miscellaneous Expenditurec)Current Liabilitiesd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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