Question

The balance of the forfeited shares account after re-issue of forfeited shares is transferred to ______.

Options

• Statement of Profit & Loss

• Share Capital A/c

• Capital Reserve A/c

• General Reserve A/c

Answer 1

The balance of the forfeited shares account after re-issue of forfeited shares is transferred to Capital Reserve A/c.

Explanation:

A capital profit is the amount of Share Forfeiture A/C that remains after deducting any discount on the reissue of forfeited shares. This type of capital profit is sent to Capital Reserve A/C rather than being accessible for dividends.