{"id":57445,"date":"2024-04-16T01:02:08","date_gmt":"2024-04-16T01:02:08","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=57445"},"modified":"2024-04-16T01:02:08","modified_gmt":"2024-04-16T01:02:08","slug":"if-the-fully-paid-up-shares-of-rs-80000-are-issued-to-sellers-in-consideration-of-net-assts-of-rs-60000-the-balance-of-rs-20000-will-be","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/if-the-fully-paid-up-shares-of-rs-80000-are-issued-to-sellers-in-consideration-of-net-assts-of-rs-60000-the-balance-of-rs-20000-will-be\/","title":{"rendered":"If the fully paid-up shares of Rs. 80,000 are issued to sellers in consideration of net assts of Rs. 60,000 the balance of Rs. 20,000 will be"},"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_6a974103df1d1\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    Debited to profit and loss account                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Debited to Goodwill account                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"true\">\r\n                    Credited to capital reserve account                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Eradiated to security premium account                <\/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 C. Credited to capital reserve account.<\/p>\n<p>When a company issues shares for a consideration in excess of the fair value of the net assets acquired, the excess is credited to a capital reserve account. This account is <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> a non-distributable reserve, which means that the company cannot distribute the amount in the account to shareholders as dividends.<\/p>\n<p>The other options are incorrect.<\/p>\n<p>Option A is incorrect because the balance of Rs. 20,000 should not be debited to the profit and loss account. The profit and loss account is used to record the company&#8217;s income and expenses for a period of time. The balance of Rs. 20,000 is not an expense, so it should not be recorded in the profit and loss account.<\/p>\n<p>Option B is incorrect because the balance of Rs. 20,000 should not be debited to the goodwill account. The goodwill account is used to record the amount paid for an asset that is in excess of its fair value. In this case, the company is not acquiring an asset, so the goodwill account should not be used.<\/p>\n<p>Option D is incorrect because the balance of Rs. 20,000 should not be eradicated to the security premium account. The security premium account is used to record the amount of money that is received by a company in excess of the par value of its shares. In this case, the company <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 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> is not issuing shares with a par value, so the security premium account should not be used.<\/p>\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":[85],"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>If the fully paid-up shares of Rs. 80,000 are issued to sellers in consideration of net assts of Rs. 60,000 the balance of Rs. 20,000 will be<\/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\/if-the-fully-paid-up-shares-of-rs-80000-are-issued-to-sellers-in-consideration-of-net-assts-of-rs-60000-the-balance-of-rs-20000-will-be\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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