Question

The excess price received over the par value of shares, should be ________ to securities premium a/c. (Fill in the blank by choosing correct option)
(a) debited
(b) credited
(c) adjusted
(d) none of these

Answer 1

Answer:

Debited

Explanation:

• The excess price which is normally received from the par value of shares is normally debited.

• This is because it adds the value and gives security to the securities premium.

• The following are some of the reasons as to why Debit is selected:

• It gives a detailed information on the increment of the number of shares in an organization.

• The Debit is normally considered as an addition in the book keeping records which gives information needed in the right column of a balance sheet.

• Debit is considered as the main item for the capital increment in the business , normally companies record this as per the excess shares re