Question

When shares are forfeited, Share Capital Account is debited with ______.

Options

• nominal (face) value of shares.

• called-up share capital up to the date of forfeiture.

• paid-up value of shares as on the date of forfeiture.

• market value of shares as on the date of forfeiture.

Answer 1

When shares are forfeited, Share Capital Account is debited with called-up share capital up to the date of forfeiture.

Explanation:

At the time of forfeiture, Share Capital Account is debited with the amount called-up on the forfeited shares up to the date of forfeiture, whether received or not.