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    Question

    The S hare application money received by a company but

    pending allotment is a type of a _______ for the company.  
    A Income Correct Answer Incorrect Answer
    B Expense Correct Answer Incorrect Answer
    C Asset Correct Answer Incorrect Answer
    D Liability Correct Answer Incorrect Answer
    E Capital Correct Answer Incorrect Answer

    Solution

    Share application money pending allotment is a liability which is shown as a separate item in the balance sheet. It is a liability since the company is liable to either allot shares against that money or refund it. Any application money received for allotment of securities and due for refund is shown under other current liabilities

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