Identify the sequence of journal entries with regard to transfer of shares application money and allotment of shares:

(A) Share Allotment A/c Dr.
To Share Capital A/c

(B) Share Application A/c Dr.
To Share Capital A/c

(C) Bank A/c Dr.
To Share Allotment A/c

(D) Share Application A/c Dr.
To Bank A/c

Choose the correct answer from the options given below:

(B), (D), (A), (C)

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

• (B) Share Application A/c Dr. To Share Capital A/c: This is the entry to transfer the application money received on the shares that have been allotted to the Share Capital Account. This happens immediately after the allotment decision is made.

• (D) Share Application A/c Dr. To Bank A/c: This is the entry to refund the application money received on the shares that were not allotted (rejected applications). This also happens around the time of allotment.

• (A) Share Allotment A/c Dr. To Share Capital A/c: This is the entry to make the allotment money due (or call the allotment money). This is done after the application process is complete and the shares are allotted.

• (C) Bank A/c Dr. To Share Allotment A/c: This is the entry to record the receipt of the allotment money from the shareholders after the due date.