Match List-I with List-II
List-I List-II (A) For Transfer of Application Money (I) Share Allotment A/c Dr. To Share Capital A/c (B) For Money Refunded on Rejected Application (II) Share Application A/c Dr. To Share Capital A/c (C) For Amount Due on Allotment (III) Share Application A/c Dr. To Bank A/c (D) For Receipt of Allotment Money (IV) Bank A/c Dr. To Share Allotment A/c
Choose the correct answer from the options given below:
Match List-I with List-II
| List-I | List-II |
|---|---|
| (A) For Transfer of Application Money | (I) Share Allotment A/c Dr. To Share Capital A/c |
| (B) For Money Refunded on Rejected Application | (II) Share Application A/c Dr. To Share Capital A/c |
| (C) For Amount Due on Allotment | (III) Share Application A/c Dr. To Bank A/c |
| (D) For Receipt of Allotment Money | (IV) Bank A/c Dr. To Share Allotment A/c |
Choose the correct answer from the options given below:
Solution
Looking at each transaction in the share capital process:
(A) For Transfer of Application Money
After shares are allotted, application money held is transferred to share capital. The entry debits Share Application A/c (to clear the liability) and credits Share Capital A/c (to recognize capital).
Entry: Share Application A/c Dr. To Share Capital A/c → Matches with (II)
(B) For Money Refunded on Rejected Application
When applications are rejected, the money collected must be returned. Share Application A/c (liability) is debited to reduce it, and Bank A/c is credited as cash goes out.
Entry: Share Application A/c Dr. To Bank A/c → Matches with (III)
(C) For Amount Due on Allotment
When allotment money becomes due (but not yet received), it creates a receivable. Share Allotment A/c is debited (asset), and Share Capital A/c is credited (equity).
Entry: Share Allotment A/c Dr. To Share Capital A/c → Matches with (I)
(D) For Receipt of Allotment Money
When allotment money is actually received, cash comes in and the receivable is cleared. Bank A/c is debited and Share Allotment A/c is credited.
Entry: Bank A/c Dr. To Share Allotment A/c → Matches with (IV)
Correct Matching: (A) - (II), (B) - (III), (C) - (I), (D) - (IV)
Answer: Option 2
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