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What is the nature of share application account?

Bijoy (CEO) (33 Points)

16 June 2020

Hello, Pls help me with question.

What is the nature of share application account.? Nominal account or personal account. ? And what is the account treatment when shares are issued at par and are payable in full in a lumpsum?

Thank you in advance..

Regards

Bijoy

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2 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 16 June 2020

I think IndAS 1 presents all the Allotment, application, first and final call classifications into Equity. This is a capital account. Then recording transactions for application, Allotment first and final call can be concise to this:

Bank

To Share Capital a/c

when payment is made, reverse the entry. Meantime, any dividend paid, retained earnings will be debited.