Company AccountsQ-5 | Introduction to Company AccountsQuestion 4885 of 112
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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. [Nov. 2020, 2 Marks]

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Detailed Solution & Explanation

True: Section 52 of the Companies Act, 2013 allows that preliminary expenses may be written off through Securities Premium Account.

About This Chapter: Partnership & Companies

Paper

Paper 1: Accounting

Weightage

15-20%

Key Topics

Admission, Retirement, Death, Shares, Debentures

This chapter covers Admission, Retirement, Death, Shares, Debentures and is part of Paper 1: Accounting in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 15-20% weightage. Focus on understanding core concepts rather than memorizing.

Key Concepts to Understand

Balance Sheet

A statement showing the financial position of a business at a particular date, listing all assets on one side and all liabilities and capital on the other side. It is not an account but a statement.

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