Question

Arrange the following in the correct sequence of Accounting for Share Capital:
(A) Forfeiture of shares for non-payment of call
(B) Money received on allotment
(C) Profit on reissue of forfeited shares accounts transferred to capital reserve
(D) Money received on application
Choose the correct answer from the options given below:

• A. (A), (B), (C), (D)
• B. (D), (A), (B), (C)
• C. (B), (C), (D), (A)
• D. (D), (B), (A), (C)

Answer 1

The Correct Option is D

The correct sequence of accounting for share capital involves the following steps:- (D) Money received on application: This is the initial step where the company receives funds from shareholders for shares applied for.- (B) Money received on allotment: After the application stage, the company collects money on the allotment of shares.- (A) Forfeiture of shares for non-payment of call: If shareholders fail to pay the call money, the shares are forfeited.- (C) Profit on reissue of forfeited shares accounts transferred to capital reserve: Any profit from reissuing the forfeited shares is transferred to a capital reserve account.