Question

At the time of forfeiture of shares the share capital account is debited with ______.

Options

• Face value

• Called up value

• Paid up value

• Issued value

Answer 1

At the time of forfeiture of shares the share capital account is debited with Called up value.

Explanation:

At the time of forfeiture of shares, the company cancels the shares by reversing the amount already called up on them. Hence, the Share Capital Account is debited with the called-up value of the forfeited shares (not face value or paid-up).