Question

Capital redemption reserve account can be used for

(a) Writing off past losses

(b) Issuing fully paid bonus shares

(c) Declaring dividends

(d) Declaring bonus to employees​

Answer 1

Answer:

issuing fully paid bones shares

Explanation:

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Answer 2

Answer:

A limited company may issue redeemable preference shares if it’s Articles of Association provide. Thus, these preference shares are liable for redemption within a period not exceeding twenty years from the date of issue. A company cannot issue irredeemable preference shares. Also, a company can redeem only fully paid-up preference shares out of the profits available for dividend or out of the proceeds of a fresh issue of shares for redemption. Hence, the preference shares are redeemed from the capital reserve account created for the purpose of the redemption.