Question

Match List-I with List-II

List-I (Name of account to be debited or credited, when shares are forfeited)	List-II (Amount to be debited or credited)
(A) Share Capital Account	(I) Debited with amount not received
(B) Share Forfeited Account	(II) Credited with amount not received
(C) Calls-in-arrears Account	(III) Credited with amount received towards share capital
(D) Securities Premium Account	(IV) Debited with amount called up

Choose the correct answer from the options given below:

• (A) - (I), (B) - (II), (C) - (III), (D) - (IV)
• (A) - (IV), (B) - (III), (C) - (II), (D) - (I)
• (A) - (I), (B) - (II), (C) - (IV), (D) - (III)
• (A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Answer 1

The Correct Option is C

Matching Accounting Entries for Share Capital Transactions 

This exercise focuses on matching accounting entries to the correct accounts used in share capital transactions. Understanding these entries is essential for accurate financial reporting for companies issuing shares.

Matching Pairs

Here's the breakdown of each matched pair:

• (A) Share Capital Account - (I) Debited with the amount called up:
  • Explanation: The Share Capital Account is debited when shares are forfeited. This reduces the share capital by the amount that was called up but not paid.
• (B) Share Forfeited Account - (III) Credited with the amount received towards share capital:
  • Explanation: The Share Forfeited Account is credited with the amount already received from shareholders before their shares were forfeited. This represents a gain for the company.
• (C) Calls-in-Arrears Account - (IV) Debited with the amount not received:
  • Explanation: The Calls-in-Arrears Account is debited when shareholders fail to pay the amount called up on their shares. This represents the amount that is outstanding.
  • (D) Securities Premium Account - (II) Credited with the amount received for premium:
    • Explanation: The Securities Premium Account is credited when shares are issued at a premium (above their par value). This account reflects the excess amount received above the par value.