CAF-1 · Chapter 8 · Question 7 of 15
Which of the following is NOT permitted to be charged or credited to the Share Premium account?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Routine annual cash dividends paid to ordinary shareholders.
Explanation
Share premium is a capital reserve and cannot be used to pay routine cash dividends. It can be used for bonus shares, writing off issue costs, or premiums on redemption.
More Statement of Changes in Equity MCQs
- Q9When an entity discovers a material error from a prior period, how is the correction presented in the statement of changes in equity?
- Q10Which document explicitly presents the reconciliation between the carrying amount of each component of equity at the beginning and end of…
- Q11In the statement of changes in equity, what is the effect of transferring Rs. 20 million from retained earnings to a general reserve?
- Q12A company issues 1 million ordinary shares of Rs. 10 each at a price of Rs. 15 per share. How is the Rs. 5 per share excess recorded?
- Q13Which of the following is an example of an item that is recognized in 'Other Comprehensive Income' and subsequently appears in the…