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Question
State whether the following statement is true.
Share application account is a personal account.
True or False
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Solution
This statement is true.
Explanation:
The Share Application Account is a personal account (specifically a representative personal account) because it represents the group of individual investors who have applied for the company’s shares. It holds the money received from these applicants until the shares are officially allotted to them. In accounting, because this account tracks the financial transactions and obligations between the company and specific individuals (the applicants), it follows the rules for personal accounts.
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