share application money

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Shreya

Shreya (Querist)
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09 March 2009 can anyone pls explain me what is share application money & how is it accounted

CMA KNVV Sri Vidya - Sri Kanth

CMA KNVV Sri Vidya - Sri Kanth (Expert)
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09 March 2009 When the company issues prospectus.
the people or company whoever want to purchase the shares. they have apply for the shares required by them .
At the time applying for the shares they are required to make some payment foe the shares required.
so at the time of applying the shares if any amount has been paid it is called as application money

CMA KNVV Sri Vidya - Sri Kanth

CMA KNVV Sri Vidya - Sri Kanth (Expert)
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09 March 2009 In case of shares u can see
Application money
Allotment money
Call money

Application money :
Is the money collected by the company at the time making an application for purchase of shares.

Allotment Money :
is he money collected by the company after making an allotment of the shares required by them

Call money :
is the money collected by the company after a particular period of time

CMA KNVV Sri Vidya - Sri Kanth

CMA KNVV Sri Vidya - Sri Kanth (Expert)
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09 March 2009 Entries for application money :

Bank a/c dr
To Share Application a/c

Share application a/c dr
to Share capital a/c

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