The correct accounting treatment in respect of share application money is analysed as below: · Section 211 of the Companies Act, 1956 provides that the balance sheet of a company shall give a true and fair view of the state of affairs of the company and shall be in the form (either horizontal or vertical) as set out in Part I of Schedule VI. · The broad heads under "Liabilities" therein are (i) Share Capital, (ii) Reserves and Surplus, (iii) Secured Loans, (iv) Unsecured Loans and (v) Current Liabilities and Provisions. The item of 'share application money' does not appear in the subheads under any of these heads. · Any subscription received by a company against issue of share capital can be regarded as "subscribed share capital" only when the share capital is actually subscribed and allotted as well. Until the allotment is made, any subscription cannot be included in the amount of subscribed share capital. [ICAI Compendium of Opinions, Vol. XII, pp. 121 to 123]. Share application money, therefore, cannot be treated as 'Share Capital". · Share application money only in respect of invalid or revoked applications and excess application money received due to over-subscripttion, however, may be treated as "Current Liabilities". The instant case does not satisfy any of the above, hence cannot be treated as "Current Liabilities" Share application money, therefore, can neither be categorized as "Share Capital' nor "Current Liabilities". · The ICAI Compendium of Opinions, [Vol. XV, (1996 Edn.) pp. 34 to 36], opines that the "share application money pending allotment" should be shown in the balance-sheet under a separate heading between "Share Capital" and "Reserves and Surplus". · Share application money is also not an instrument, much less an Equity linked instrument.
Share premium account is that amount in which amount in excess of par value of shares is received while share application accounts records all money received from potential investors in process of share issue.
The sahre application is very much a part of the sahre holders money, hence, the same should be treated at par with the share capital unless the period of 60 days has been elapsed.
A statement of money received and paid with a balance is an account.
because you received cash, thus , the asset account increases: DR cash. This amount receiced and dercresed in fee erned (money paid for service) -> Cr Fee earned
From the company's point of view yes it is true because common stock is the money we borrow or acquire from share holders and that's why it is the liability of the company to pay back at the time of liquidation of the company to share holders.
Advance subscription of shres
Share application money pending allotment is nothing but the application amount is received and shares are not alloted by the company.share warrants are bearer documents which are used at the time of share transfer
Share premium account is that amount in which amount in excess of par value of shares is received while share application accounts records all money received from potential investors in process of share issue.
minimum 5% of face value of shares
The sahre application is very much a part of the sahre holders money, hence, the same should be treated at par with the share capital unless the period of 60 days has been elapsed.
bank A/C Dr To Share Applications A/C (APPLICATION MONEY FOR_____ SHARES@Rs _____per share received share application a/c Dr TO SHARE CAPITAL A/C (APPLICATIONS MONEY ON _____ SHARES AT Rs ____ PER SHARE ALLOTED AS PER DIRECTORS RESOLUTION NO____DATED____TRANSFERED TO SHARE CAPITAL
One application is in accounting money- money owed is a negative balance ; money owed you is positive. Another application is in keeping score in games in which penalties can subtract from you score- you may end up with a negative score.
Shareholders' funds is all the money belonging to common stock shareholders which includes the balance of share capital, all profits retained and money classified as reserves.
Share suspense account is a temprorary a/c created, to transfer any receipts on shares issue or re-issue (in case of forefeiture) is case of a pending decision regarding that receipt. Eg: when re-issue is made in case of a forfeiture of share, journalise that transation as Bank a/c Dr. To share suspense a/c then after decision regarding reissue, share suspense a/c Dr. To share capital a/c balance if any in share suspense will be paid of when it is not alloted... share suspence a/c Dr. To Bank a/c
Profit reinvested i the company by its share holders is called share deposit money
a "credit balance" is money that you have.
A balance is the amount of money you have on your phone!