Question:
If all the forfeited shares are reissued, the balance, if any, left in the Forfeited Shares Account is transferred to:
If all the forfeited shares are reissued, the balance, if any, left in the Forfeited Shares Account is transferred to:
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When forfeited shares are reissued, the balance in the Forfeited Shares Account is usually transferred to the Capital Reserve Account.
Updated On: June 02, 2025
- General Reserve Account
- Securities Premium Account
- Capital Reserve Account
- Statement of Profit and Loss
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The Correct Option is C
Solution and Explanation
When forfeited shares are reissued, the balance remaining in the Forfeited Shares Account is transferred to the Capital Reserve Account.
This is because any amount remaining after adjusting for the calls not paid on forfeited shares is considered capital profit and is transferred to the Capital Reserve.
Therefore, the balance left in the Forfeited Shares Account is transferred to the Capital Reserve Account.
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