Question

Preliminary expenses are transferred to.... Shareholders account.

Answer 1

• income and expenditure account (6) Cash paid to creditors can be calculated ... (50) The vendor company transfers preliminary expenses (at the time of absorption) to — (i) Equity .

Answer 2

Preliminary expenses are transferred to the EQUITY shareholder's account.

• Because equity shares represent a company's ownership, the money raised through their issue is known as ownership capital, and shareholders are known as company owners.
• Equity shareholders are the company's original proprietors who have voting rights.
• The company's management is chosen by equity shareholders, who also have voting rights.
• The availability of surplus capital determines the dividend rate on equity capital. On the other hand, the dividend rate on equity capital is not set in stone.