Opening Share Capital
Very straight forward one. When a new company incorporates with say, one Director who is the only shareholder, has shares of say £1 x 1 share and the money isn't actually paid into the bank, I always debit the DLA. However, I was talking to another accountant the other day who said that any opening share capital which isn't paid in the bank is always treated as being paid into the bank whether it is or isn't. When I queried about bank reconciliation etc he said that the amount is so small it doesn't make any difference. Rather slack in my opinion or am I just too much of a perfectionist these days?
What I do
If there's a sufficient credit balance on director's current I will debit that.
Otherwise I will treat as cash in hand.
I never treat it as unpaid share capital as it's very mickey mouseish.
Are you sure this person didn't mean treating it as cash at bank and in hand?
Peter
That's twice you've made me laugh in as many days, today with your first reply here, and yesterday with this http://www.accountingweb.co.uk/anyanswers/starting-small-practice-0
Thanks! :)
PS: I also debit the DLA.
I know it's a bit of a technicallity
but isn't this illegal? Do the principals on incorporation not sign that the money has been paid?
Idiot
He's an idiot.