FAC 1601 Discussion Classes Part2 Best study material in accounting Guaranteed Pass
Classes of shares: – Ordinary shares - shareholder has voting rights; may receive a dividend. – Preference shares - shareholder do not have voting rights. Receives a fixed dividend percentage and has priority over ordinary shares with regard to dividends and repayment of capital on liquidation. ACCOUNTING FOR THE ISSUE OF SHARES Receipt of money, as payment must accompany the application for the subscription of shares: Dr: Bank account Cr: Application and allotment (class of share) account Upon allotment: Dr: Application and allotment (class of share) account Cr: Share capital account In cases where there is oversubscription, oversubscribed applications: Dr: Application and allotment (class of share) account Cr: Bank account Incorporators of the company: The first issue of shares must a
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