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When applications for more shares of a company are received than the number of shares offered to the public for a subscription it is called ______? -

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Question

When applications for more shares of a company are received than the number of shares offered to the public for a subscription it is called ______?

Options

  • Under subscription

  • Over subscription

  • Both under and over subscription

  • None of the above

MCQ
Fill in the Blanks

Solution

When applications for more shares of a company are received than the number of shares offered to the public for a subscription it is called Over subscription.

Explanation:

When more applications for a company's shares are received than the number of shares available for subscription to the general public. This is known as 'Over Subscription' and occurs most commonly in relation to the share issuance of well-managed and financially robust corporations.

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Accounting Treatment for Share Capital
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