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Dear sir
How is any premium on an issue of shares treated?
My answer was revenue reserve, but to see it was capital reserve? How come I’m wrong?The share premium account is always a capital reserve!
Revenue reserves only relate to profits that have been earned – issuing shares at a premium is not earning profit, and the share premium account cannot be distributed as dividend.
I can only assume you are wrong because you forgot!
I suggest that you watch our free lectures on Company accounts.
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