Assertion (A) Premium received on issue of shares is credited to share premium account, but not to profit and loss account.
Reason (R) Since, share premium is not a trading profit, it is not distributed to shareholders.

A. Both (A) and (R) are true and (R) is the correct explanation of (A)

B. Both (A) and (R) are true, but (R) is not the correct explanation of (A)

C. (A) is true, but (R) is false

D. (A) is false, but (R) is true

Answer: Option A