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Question

When shares are issued to promoters which account should be debited ?

A
Share Capital A/c
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B
Assets A/c
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C
Promoters A/c
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D
Goodwill A/c
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Solution

The correct option is D Goodwill A/c
Promoters are the person who brings the company in to existence. For this work done, they are remunerated in the form of shares. The goodwill account is debited in case shares are issued to promoters as they are not the shareholders of the company.

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