When ordinary shares are issued for more than their nominal value, the excess amount is normally credited to which account?
Correct answer: B. Share premium account
- A. General reserve
- B. Share premium account
- C. Retained earnings account
- D. Revaluation surplus account
Explanation
The amount received above the nominal value of issued shares is called share premium or securities premium. It is recorded separately from ordinary share capital and is not normally treated as trading profit.
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