Accountancy Part AAccounting for Shares

Arrange the following steps in the order of occurrence:(A) Pro-rata a…

Arrange the following steps in the order of occurrence:

(A) Pro-rata allotment to all the applicants.

(B) Share first call money is due and called.

(D) Share second and final call money is due and called.

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → (C), (A), (B), (D)

A company collects the amount on its shares in instalments: with the application, on allotment, and then in calls. Allotment can only be made after applications have come in, and the calls come after allotment.

(C) Application money received from the share applicants. — the first instalment comes with the application.

(A) Pro-rata allotment to all the applicants. — once the applications are in (here more than the shares offered), the directors allot the shares, pro-rata to all.

(B) Share first call money is due and called. — after allotment, the company calls the next instalment.

(D) Share second and final call money is due and called. — the word final marks the last instalment, so it comes at the end.

NCERT (2026-27 edition):
Issue of Shares – “A salient characteristic of the capital of a company is that the amount on its shares can be gradually collected in easy instalments spread over a period of time depending upon its growing financial requirement. The first instalment is collected along with application and is thus, known as application money, the second on allotment (termed as allotment money), and the remaining instalments are termed as first call, second call and so on. The word final is suffixed to the last instalment.”