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

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.



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