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JAMB Principles of Accounts 2003 Question 45

Question 45

Company Accounts

The necessary accounts to be opened on the issue of ordinary share capital are

  1. A.preference share capital, cash and allotment accounts
  2. B.bank and ordinary share capital accounts
  3. C.cash and ordinary share capital accounts
  4. D.nominal value and ordinary share capital accounts
Show the answer and explanation

Answer: B (bank and ordinary share capital accounts)

Explanation

Money for shares is paid into the bank, so the entries are debit bank and credit ordinary share capital.