[amp_mcq option1=”Share premium received on issue of shares can be utilized for writing off the preliminary expenses” option2=”Capital Redemption Reserve is available only for issuing fully paid Bonus Shares” option3=”Discount on issue of shares is shown as a reduction from capital” option4=”At the time of Right issue, the existing share holders gain because the share are generally issued at a price lower than the market price” correct=”option2″]<\/p>\n
The correct answer is: B. Capital Redemption Reserve is available only for issuing fully paid Bonus Shares.<\/p>\n
Share premium received on issue of shares can be utilized for writing off the preliminary expenses. This is because share premium is the excess of the amount received on issue of shares over the face value of the shares. It is a capital reserve and can be used for a variety of purposes, including writing off preliminary expenses.<\/p>\n
Discount on issue of shares is shown as a reduction from capital. This is because discount on issue of shares is the difference between the face value of the shares and the amount received on issue of shares. It is a capital reserve and is shown as a reduction from capital in the balance sheet.<\/p>\n
At the time of Right issue, the existing share holders gain because the share are generally issued at a price lower than the market price. This is because a right issue is a type of offer made to existing shareholders to subscribe for additional shares in the company. The shares are usually offered at a price below the market price, which gives existing shareholders the opportunity to buy shares at a discount.<\/p>\n
Therefore, the only statement that is incorrect is B. Capital Redemption Reserve is available only for issuing fully paid Bonus Shares.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Share premium received on issue of shares can be utilized for writing off the preliminary expenses” option2=”Capital Redemption Reserve is available only for issuing fully paid Bonus Shares” option3=”Discount on issue of shares is shown as a reduction from capital” option4=”At the time of Right issue, the existing share holders gain because the share … <\/p>\n