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Select the appropriate answer from the alternative given below and rewrite the sentence. When shares are forfeited, share capital account is _____________. - Book Keeping and Accountancy

MCQ
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Select the appropriate answer from the alternative given below and rewrite the sentence.

When shares are forfeited, share capital account is _____________.

Options

  • debited

  • credited

  • adjusted

  • none of the above

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Solution

When shares are forfeited, share capital account is debited.

Explanation: Share Capital Account represents the liability of the company as it is the amount that is borrowed from the public. Therefore, at the time of forfeiture of shares, it is debited with a called-up amount.
Concept: Accounting Treatment of Forfeiture and Re-issue of Share
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APPEARS IN

Micheal Vaz Accounts - Book Keeping and Accountancy HSC 12th Standard Maharashtra State Board
Chapter 10 Company Accounts Part - 1 (Accounting for Shares)
Exercise | Q 12 | Page 351
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