Question

    Where to show Share application money received in

    excess of issued share capital?
    A Current liabilities Correct Answer Incorrect Answer
    B Shareholders fund Correct Answer Incorrect Answer
    C Share application money pending allotment Correct Answer Incorrect Answer
    D Non-current liabilities Correct Answer Incorrect Answer
    E Money received against share warrents Correct Answer Incorrect Answer

    Solution

    Share application money received in excess of issued share capital should be shown as a current liability. When a company receives share application money in excess of its issued share capital, it represents an obligation to return the excess amount to the applicants if the shares are not allotted. The amount which is yet to be allotted will come under Share application money pending allotment, however amount over and above the issued share capital will be shown as current liability.

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