{"id":35431,"date":"2024-04-15T09:46:01","date_gmt":"2024-04-15T09:46:01","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=35431"},"modified":"2024-04-15T09:46:01","modified_gmt":"2024-04-15T09:46:01","slug":"as-per-section-52-of-the-companies-act-2013-the-balance-in-the-security-premium-account-cannot-be-utilized-for","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/as-per-section-52-of-the-companies-act-2013-the-balance-in-the-security-premium-account-cannot-be-utilized-for\/","title":{"rendered":"As per Section 52 of the companies Act, 2013, the balance in the Security Premium Account cannot be utilized for:"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9a383284f62\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    payment of dividend                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    writing off discount on issue of shares                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    issue of fully paid-up bonus share                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"true\">\r\n                    capital losses                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: <strong>D. capital losses<\/strong><\/p>\n<p>Section 52 of the Companies Act, 2013 states that the balance in the Security Premium Account can be utilized for the following purposes:<\/p>\n<ul>\n<li>Payment of dividend<\/li>\n<li>Writing off discount on issue of shares<\/li>\n<li>Issue of fully paid-up bonus shares<\/li>\n<\/ul>\n<p>The balance in the Security Premium Account cannot be utilized for capital losses. This is because capital losses are losses that a company incurs when it sells an asset for less than its book value. The Security Premium Account is a reserve account that is used to record the premium that a company receives when it issues shares above their par value. The premium is a capital gain for the company, and it cannot be used to offset capital losses.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: Payment of dividend. The balance in the Security Premium Account can be used to pay dividends to shareholders. This is because the premium is a capital gain for the company, and it can be used to <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> distribute profits to shareholders.<\/li>\n<li>Option B: Writing off discount on issue of shares. The balance in the Security Premium Account can be used to write off the discount on issue of shares. This is because the discount is a capital loss for the company, and it can be used to reduce the company&#8217;s net worth.<\/li>\n<li>Option C: Issue of fully paid-up bonus shares. The balance in the Security Premium Account can be used to issue fully paid-up bonus shares to shareholders. This is because the premium is a capital gain for the company, and it can be used to increase the company&#8217;s share capital.<\/li>\n<li>Option D: Capital losses. The balance in the Security Premium Account cannot be used for capital losses. This is because capital losses are losses that a company incurs when it sells an asset for less than its book value. The Security Premium Account is a reserve account that is used to record the premium that a company receives when it issues shares above their par value. The premium is a capital gain for the company, and it cannot be used to offset capital losses.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[704],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>As per Section 52 of the companies Act, 2013, the balance in the Security Premium Account cannot be utilized for:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/as-per-section-52-of-the-companies-act-2013-the-balance-in-the-security-premium-account-cannot-be-utilized-for\/\" 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