Accountancy Part AAccounting for Shares

What is the correct sequence of allotment of shares? A. Allotment mon…

What is the correct sequence of allotment of shares?

A. Allotment money received
B. Inviting applications from investors
C. Allotment due
D. Application Money received
E. Share Call Money Due

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → B, D, C, A, E

The steps follow the order in which the money is asked for and received:

(B) The company issues a prospectus inviting applications from investors.
(D) Application money is received with the applications.
(C) On allotment, the allotment money becomes due.
(A) Allotment money is received.
(E) Later the call money is made due.

NCERT (2026-27 edition):
Issue of Shares – “… • Issue of Prospectus: The company first issues the prospectus to the public. Prospectus is an invitation to the public that a new company has come into existence and it needs funds for doing business. It contains complete information about the company and the manner in which the money is to be collected from the prospective investors. • Receipt of Applications: When prospectus is issued to the public, prospective investors intending to subscribe the share capital of the company would make an application along with the application money and deposit the same with a scheduled bank as specified in the prospectus.”

NCERT (2026-27 edition):
Accounting Treatment

Extract from the NCERT textbook

NCERT (2026-27 edition):
Accounting Treatment – “… On Calls : Calls play a vital role in making shares fully paid-up and for realising the full amount of shares from the shareholders.”