BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When Allotment money is received, the entry will be ____
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Debit:Share Capital Credit:Share Allotment Account
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Debit:Share Allotment Account Credit:Share Capital
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Debit:Cash Account Credit:Share Allotment Account
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Debit:Share Allotment Credit:Cash Account
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Explanation:
Detailed explanation-1: -When allotment money is received, the following entry is passed: Bank a/c Dr. 4.
Detailed explanation-2: -An allotment mail will be sent on the registered email id on the day of allotment or day prior to listing. Shares will be credited in the demat account number mentioned on the application form.
Detailed explanation-3: -In allotment of shares, A/c is debited and A/c is credited, for receipt of allotment amount.
Detailed explanation-4: -Share Application or share allotment or Share capital A/c all are personal accounts as they represent money from the shareholders and when money is due, these are to be debited because of the rule “Debit the receiver".
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