Securities Premium Reserve is shown on the Labs
side in the Bac
Sheet under the
a) Reserve and Surplus
c) Share Capital
d) None of the above
Answers
Answer:
option A- reserves and surplus
Answer:
Explanation:
Share premium is the credited difference in price between the par value, or face value, of shares, and the total price a company received for recently-issued shares.
The amount credited in the share premium account typically fluctuactes quarter-to-quarter as a company issues new shares at market value, rather than at the par value.
The share premium cannot be used for distributing dividends or any other payouts, and can only be used for whatever has been expressly laid out in the company's bylaws.
Typically, share premium can be used to write off underwriting costs, pay commissions, and other equity-related costs; companies can issue bonus shares from the share premium account as well.
A share premium account appears in the shareholders' equity section of the balance sheet.