Question

In a scheme of capital reduction any new liability to be provided for such as arrears of preference dividend must be met out of which account?
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Answer 1

Answer:

capital reduction

Explanation:

under thisbonly

Answer 2

Concept Introduction:-

A phrase set up of a subject, verb, object, and modifiers. A grouping of modifiers, a subject, a verb, and an object.

Explanation:-

We have been given a question that in a scheme of capital reduction any new liability to be provided for such as arrears of preference dividend must be met out of which account.

We need to find the solution to the question.

Capital Reduction Account, is to be opened for transferring the part of capital which is lost, i.e., not represented by assets. In other words, this account reveals the sacrifices made by various parties, viz. equity shareholders, preference shareholders, debenture-holders, creditors, etc. Capital reduction is the process of decreasing a company's shareholder equity through share cancellations and share repurchases, also known as share buybacks. The reduction of capital is done by companies for numerous reasons, including increasing shareholder value and producing a more efficient capital structure.

Final Answer:-

The correct answer is capital reduction is the process of decreasing a company's shareholder equity through share cancellations and share repurchases, also known as share buybacks.

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