Maharashtra State BoardHSC Arts 12th Board Exam
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State, Whether the Following Statements is True Or False. - Book Keeping and Accountancy

MCQ
True or False

State, whether the following statements is True or False.
Share forfeited balance is transferred to Capital Reserve Account.

Options

  • True

  • False

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Solution

True
Explanation:
 On forfeiture, the amount received on such shares is transferred to the Share Forfeiture Account. Later, when the forfeited shares are reissued at a discount, the amount of discount is set off against the Share Forfeiture Account and the balance is transferred to the Capital Reserve Account. Only when the forfeited shares are reissued, the amount in the Share Forfeiture Account is transferred to the Capital Reserve Account.

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 11 | Page 351
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