{"id":47548,"date":"2024-04-15T22:28:21","date_gmt":"2024-04-15T22:28:21","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=47548"},"modified":"2024-04-15T22:28:21","modified_gmt":"2024-04-15T22:28:21","slug":"abc-ltd-was-incorporated-with-an-authorized-share-capital-of-rs-100000-equity-shares-of-rs-10-each-the-board-of-directors-decided-to-allot-10000-shares-credited-as-fully-paid-to-the-promoters-of","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/abc-ltd-was-incorporated-with-an-authorized-share-capital-of-rs-100000-equity-shares-of-rs-10-each-the-board-of-directors-decided-to-allot-10000-shares-credited-as-fully-paid-to-the-promoters-of\/","title":{"rendered":"ABC Ltd was incorporated with an authorized share capital of Rs. 1,00,000 equity shares of Rs. 10 each. The board of directors decided to allot 10,000 shares credited as fully paid to the promoters of the company for their services. Which account should be debited in the books of ABC Ltd?"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a972c66b514f\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    Promoter&#039;s account                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Service&#039;s account                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    Goodwill account                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"true\">\r\n                    Share capital account                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is D. Share capital account.<\/p>\n<p>When a company allots shares to its promoters, the share capital account is debited with the face value of the shares allotted. In this case, the face value of each share is Rs. 10, so the share capital account will be debited by Rs. 100,000 (10,000 shares x Rs. 10 per share).<\/p>\n<p>The other options are incorrect because:<\/p>\n<ul>\n<li>Promoter&#8217;s account is a liability account <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> that is used to record the amount that the promoters owe to the company. In this case, the promoters are not owing anything to <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> the company, so this account should not be debited.<\/li>\n<li>Service&#8217;s account is an expense account that is used to record the cost of services that the company has received. In this case, the company is not receiving any services, so this account should not be debited.<\/li>\n<li>Goodwill account is an intangible asset account that is used to record the value of the company&#8217;s reputation and other intangible assets. In this case, the company is not acquiring any intangible assets, so this account should not be debited.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ABC Ltd was incorporated with an authorized share capital of Rs. 1,00,000 equity shares of Rs. 10 each. The board of directors decided to allot 10,000 shares credited as fully paid to the promoters of the company for their services. Which account should be debited in the books of ABC Ltd?<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/abc-ltd-was-incorporated-with-an-authorized-share-capital-of-rs-100000-equity-shares-of-rs-10-each-the-board-of-directors-decided-to-allot-10000-shares-credited-as-fully-paid-to-the-promoters-of\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ABC Ltd was incorporated with an authorized share capital of Rs. 1,00,000 equity shares of Rs. 10 each. The board of directors decided to allot 10,000 shares credited as fully paid to the promoters of the company for their services. 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The board of directors decided to allot 10,000 shares credited as fully paid to the promoters of the company for their services. Which account should be debited in the books of ABC Ltd?","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/abc-ltd-was-incorporated-with-an-authorized-share-capital-of-rs-100000-equity-shares-of-rs-10-each-the-board-of-directors-decided-to-allot-10000-shares-credited-as-fully-paid-to-the-promoters-of\/","og_locale":"en_US","og_type":"article","og_title":"ABC Ltd was incorporated with an authorized share capital of Rs. 1,00,000 equity shares of Rs. 10 each. The board of directors decided to allot 10,000 shares credited as fully paid to the promoters of the company for their services. 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