Question

Explain the terms ‘Over-subscription’ and ‘Under-subscription’. How are they dealt with in accounting records?

Answer 1

Answer:

Explanation:

A company issues shares to the general public for subscription. It receives the applications along with the application money so that it can allot the shares to the applicants. It may hardly happen that it receives the applications equal to the number of shares issued. Thus, there may be either under subscription or oversubscription.