Premium earned on issue of Shares' is an example of
A. Capital expenditure
B. Revenue receipt
C. Deferred revenue expenditure
D. None of these
Answer: Option D
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A premium amount is any sum that is charged in addition to the share's face value. Capital receipts are non-recurring receipts that result in an increase in liabilities or a reduction in assets. When premium money is not regularly received, it exposes the company to responsibility. It is therefore a capital receipt.