In the balance sheet of x Limited, preliminary expenses
amounting to 5 lakhs and securities premium account of 35
lakhs are appearing. The accountant can use the balance in
securities premium account to write off preliminary expenses. True or false with reason
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According to the provision of Section 52 of Companies Act 2013, the amount of securities premium can be utilise in writting off preliminary expenses. In the given situation company has sufficient fund in securities premium account to write off preliminary expenses.
Hence, the above mentioned statement is True.
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