Company accounts
This query is : Resolved
12 June 2012
when the company issues shares,then the entries passed are
1. for receipt of applications
bank a/c....dr
to app a/c
2. for transferring app money to share capital a/c
app a/c......dr
to share capital a/c
3. for the allotment due
allotment a/c....dr
to share capital a/c
4. for allotment money received
bank a/c.....dr
to allotment a/c
friends.....my query here is
why is there a need to pass the 3rd entry i.e., due entry
we can pass the entries when we receive the allotment money...like this
bank a/c.....dr
to allotment a/c
later transferring to share capital a/c........please reply
1. for receipt of applications
bank a/c....dr
to app a/c
2. for transferring app money to share capital a/c
app a/c......dr
to share capital a/c
3. for the allotment due
allotment a/c....dr
to share capital a/c
4. for allotment money received
bank a/c.....dr
to allotment a/c
friends.....my query here is
why is there a need to pass the 3rd entry i.e., due entry
we can pass the entries when we receive the allotment money...like this
bank a/c.....dr
to allotment a/c
later transferring to share capital a/c........please reply
12 June 2012
Dear Chintan
In this case the Timing of Share Allotment Money Due is before the receipt of the money. that is why u pass the due entry before the receipt entry.
[Ex:- when u buy goods from creditor the due entry comes before the payment entry]
in case of share application the timing of receipt of money falls before the application money due to company entry.
In this case the Timing of Share Allotment Money Due is before the receipt of the money. that is why u pass the due entry before the receipt entry.
[Ex:- when u buy goods from creditor the due entry comes before the payment entry]
in case of share application the timing of receipt of money falls before the application money due to company entry.
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