Question

If a shareholder does not pay his dues on allotment, for the amount due, there will be a ______.

Options

• Credit balance in the Shares Allotment Account.

• Debit balance in the Shares Forfeiture Account.

• Credit balance in the Shares Forfeiture Account.

• Debit balance in the Shares Allotment Account.

Answer 1

If a shareholder does not pay his dues on allotment, for the amount due, there will be a debit balance in the Shares Allotment Account.

Explanation:

When a shareholder does not pay the amount due on allotment, the amount remains outstanding in the Share Allotment Account. Therefore, Share Allotment A/c will show a debit balance for the unpaid amount.