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Question
Forfeiture of shares results in the reduction of ______.
Options
Subscribed Capital
Authorised Capital
Reserve Capital
Fixed Assets
MCQ
Fill in the Blanks
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Solution
Forfeiture of shares results in the reduction of Subscribed Capital.
Explanation:
Forfeiture of shares means cancellation of those shares where shareholders failed to pay the called-up amount. This reduces the Subscribed Capital because the cancelled shares are no longer part of the company’s capital, while Authorised and Issued Capital remain unchanged.
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Chapter 6: Company Accounts - Issue of Shares - OBJECTIVE TYPE QUESTIONS [Page 6.205]
