Archive | Shares

Types of Shares: Preference and Equity | Accounting

The shares which can be issued by a company, are of two types:- 1. Preference Shares 2. Equity Shares. Type # 1. Preference Shares: The Preference Shares are those which have some preferential rights over the other types of shares. A share to be preference share, must have two preferential rights: [Sec. 85(1)] (a) They […]

Stock and Shares of a Company | Capital | Accounting

In this article we will discuss about stock and shares of a company. Also learn about the difference between them. Stock: When all the shares of a company have been fully paid up, they may be converted into stock if so authorised by the Articles, as per Sec. 94(1) (c). It is another kind of […]

Accounting Entries for Issue of Shares at Premium | India | Company

In this article we will discuss about the accounting entries for the issue of shares at premium, explained with the help of an illustration.  A company likely to be very successful and enjoying a good reputation, asks intending shareholders to pay, on each share, a sum higher than the face value. In other words, when […]

Accounting Entries for Calls-In-Arrears and Calls-In Advance | Shares

In this article we will discuss about the accounting entries for call-in-arrears and calls-in-advance, explained with the help of an illustration. Calls-In-Arrears: If any amount, called in respect of a share, is not paid before or on the date fixed for payment thereof, such amount which is not paid, is called “CALLS-IN-ARREARS”. Amount may be […]

Accounting Treatment for Issue of Shares at Par | India | Company

In this article we will discuss about the accounting treatment for the issue of shares at par, explained with the help of suitable illustrations. When a shareholder is required to pay an amount equal to the face value or nominal value of shares, then such issue of shares is at par. To have a complete […]

Issue of Shares: Problems and Solutions | India | Accounting

Here is a compilation of top six accounting problems on issue of shares with its relevant solutions.  Problem 1 (Issue of Shares at Par—Journal, Cash Book and Balance Sheet): A Limited Company issued 25,000 Ordinary Shares of Rs. 25 each payable Rs. 5 on application, Rs. 10 on allotment and Rs. 5 each on subsequent […]

Accounting Procedure for Issue of Shares at Discount

In this article we will discuss about the accounting procedure for the issue of shares at discount, explained with the help of necessary journal entries and illustration.  Generally a Company is not allowed to issue shares at a discount, i.e. at a price less than the face value of the shares. However, if a Company […]

Under-Subscription and Over-Subscription of Shares | Company

In this article we will discuss about the accounting procedure for under-subscription and over-subscription of shares, explained with the help of suitable illustrations. Under-Subscription: Sometimes, the applications for shares received are less than the number of shares issued. For instance, a Company issued 10,000 shares to the public and the Company received applications for 8000 […]

Journal Entries for Issue of Shares | Company | Accounting

In this article we will discuss about the journal entries required for the issue of shares, explained with the help of suitable illustrations. Many times, it is seen that shares have been allotted to persons or firms, from whom assets have been purchased. Such issues of shares have been clearly shown in Balance Sheet and […]

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