Question 37 of 40
Q.The amount received over and above the par value is credited to :
(a) Share capital account
(b) Securities premium account
(c) Forfeited shares account
(d) Calls in advance account
Puducherry TnboardTamil Nadu HSC (DGE) Commerce Board 2026MCQ· 1mImportance★★★★★
93% · 37/40 Questions
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Start your 14-day free trial to unlock the full solution →Amount received above par value = premium → credited to Securities Premium account. Option (b).
A share has a face/par value (say ₹10). If a company issues it at ₹12, the ₹10 is capital and the extra ₹2 is a premium on issue.
- Share Capital account is credited only with the nominal (face) value called up.
- The excess over face value is a capital receipt and must be credited to the Securities Premium account (a statutory reserve with restricted uses under the Companies Act — e.g. issuing bonus shares, writing off preliminary expenses). …
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