📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

  • google app store apple app store
  • ✖

      Question

      In preparing financial statements as per Schedule III of

      the Companies Act, ABC Ltd. classifies ‘Share Application Money Pending Allotment’ under current liabilities. The amount is intended for equity shares and complies with conditions of allotment. Is this classification correct?
      A Yes, if allotment not done within 12 months Correct Answer Incorrect Answer
      B No, it should be shown under equity Correct Answer Incorrect Answer
      C Yes, since it's money received in advance Correct Answer Incorrect Answer
      D No, it should be disclosed in notes Correct Answer Incorrect Answer

      Solution

      If the conditions of allotment are met, such application money is part of equity and not a liability.

      Practice Next
      ask-question