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Numerical Example of Share Capital

If a sharehol...

Question

If a shareholder does not pay his dues on allotment, for the amount due, there will be a ________________.

A

Credit balance in the share allotment Account

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B

Debit balance in the share forfeiture Account

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C

Credit balance in the share forfeiture Account

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D

Debit balance in the share allotment Account

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Solution

The correct option is D Debit balance in the share allotment Account
Share Allotment A/c represents collectively the amount due from all the shareholders on account of Allotment money.
Just like when you sell goods on credit, you don't receive money but credit sales, similarly though allotment money is not received but Share Capital A/c is credited.

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