Question

Balance of share forfeiture account is shown in the balance sheet under the item ______.

Options

• current liabilities and provisions

• reserves and surpluses

• share capital

• unsecured loans

Answer 1

Balance of share forfeiture account is shown in the balance sheet under the item share capital.

Explanation:

The balance of the share forfeiture account is shown under share capital because it represents actual capital money kept from investors. According to Schedule III of the Companies Act, this remaining balance is added directly to the paid-up capital total in the notes to the balance sheet until those specific shares are reissued.