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JAMB Principles of Accounts 2008 Question 43

Question 43

Company Accounts

Cash received from the subscribed shares is recorded by debting

  1. A.application, allotment and crediting cash
  2. B.allotment and crediting cash
  3. C.cash and crediting subscribed shares
  4. D.cash, crediting application and allotment account
Show the answer and explanation

Answer: D (cash, crediting application and allotment account)

Explanation

Cash comes in, so debit cash; the application and allotment account is credited.