Share allotment account
Share forfeited account
Share first call account
Share premium account
Answer is Right!
Answer is Wrong!
The correct answer is D. Share premium account.
A share premium account is a company’s account that records the amount of money received by the company when it issues shares at a premium. A premium is the amount of money that a shareholder pays for a share that is above the face value of the share.
When a company issues shares at a premium, the amount of the premium is credited to the share premium account. This account is then used to offset any losses that the company may incur, or to pay dividends to shareholders.
The other options are incorrect because:
- A share allotment account is an account that records the amount of money that a shareholder pays for a share when it is allotted to them.
- A share forfeited account is an account that records the amount of money that a shareholder forfeits when they fail to pay the call on their shares.
- A share first call account is an account that records the amount of money that a shareholder pays for a share when the first call on their shares is made.