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Question
In allotment of shares, for transfer of application money, __________ A/c is debited and _________ A/c is credited.
In allotment of shares, for transfer of application money, __________ A/c is debited and _________ A/c is credited.
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Solution
The correct option is A Share Application, Share Capital
When minimum subscription has been received and certain legal formalities on the allotment of shares have been duly complied with, the directors of the company proceed to make the allotment of shares. The allotment of shares implies a contract between the company and the applicants who now become the allottees and assume the status of the shareholders or members. The journal entry for transfer of application money is:Share Application A/c Dr. To Share Capital A/c
When minimum subscription has been received and certain legal formalities on the allotment of shares have been duly complied with, the directors of the company proceed to make the allotment of shares. The allotment of shares implies a contract between the company and the applicants who now become the allottees and assume the status of the shareholders or members. The journal entry for transfer of application money is:
Share Application A/c Dr.
To Share Capital A/c
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