Practicing Success
Which account is used to temporarily hold the money received from share applicants? |
Allotment Account Share Capital Account Share Application Account Dividend Account |
Share Application Account |
The "Share Application Account" is used to temporarily hold the money received from share applicants during the initial stages of the share issuance process. When potential investors apply for shares, they typically need to submit an application along with the application money. This money is held in the Share Application Account until the allotment process is completed. The Share Application Account serves as a separate ledger account to keep track of the funds received from applicants before the allotment decision is made. Once the shares are allotted and the applicants' acceptances are confirmed, the money from the Share Application Account is usually transferred to the Share Capital Account to formalize the inclusion of the application money into the company's share capital. |