Kotak Mahindra Bank Finance Executive Interview Questions and Answers

The journal entry for share issuance records the increase in equity and cash or other assets received.

• Debit Cash/Bank for the amount received from shareholders.

• Credit Share Capital for the nominal value of shares issued.

• Credit Share Premium for any amount received above the nominal value.

• Example: If 1,000 shares of $1 par value are issued at $5 each, debit Cash $5,000, credit Share Capital $1,000, and credit Share Prem

A debit balance in creditor accounts indicates overpayments, affecting liabilities and cash flow on the balance sheet.

• A debit balance in creditor accounts suggests that the company has overpaid its suppliers.

• This overpayment will appear as a current asset on the balance sheet, reducing total liabilities.

• For example, if a company owes $10,000 but has a $2,000 debit balance, its net liability is effectively $8,000.

• This s...read more