Multiple choice

Debenture premium cannot be used to

  1. write off the discount on issue of shares or debentures

  2. write off the premium on redemption of shares or debentures

  3. pay dividends

  4. write off underwriting commission
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 The premium on debentures is credited to 'Securities Premium' Account and Securities Premium can be used to write off the discount on issue of shares or debentures or premium on redemption of shares or debentures or underwriting commission but cannot be used to pay dividends.

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