Securities Premium Reserve as per section 52(2) of the companies Act 2013 can be used :(A) To write-off preliminary expenses of the company(B) To issue fully paid bonus shares to the extent not exceeding unissued share capital of the company(C) To pay premium on the redemption of preference shares or debentures(D) To write off discount allowed on the goods sold on creditChoose the correct answer from the options given below :
- A(A), (B) and (D) only
- B(B), (C) and (D) only
- C(A), (C) and (D) only
- D(A), (B) and (C) only
Solution & Step-by-step Explanation
Section 52(2) of the Companies Act 2013 restricts the use of the Securities Premium Account to specific purposes:(A) Writing off preliminary expenses.(B) Issuing fully paid bonus shares to members.(C) Providing for the premium payable on redemption of preference shares or debentures.Writing off discount on goods sold (D) is a revenue expense and cannot be adjusted against the Securities Premium Reserve.Thus, only (A), (B), and (C) are correct.