At the time of forfeiture, share capital Account is debited with ________.

Face Value

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Nominal Value

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Paid up Value

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Called up Value

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Solution

The correct option is D Called up Value
Forfeiture of shares is the cancellation of the shares of those shareholders who haven't paid the required value.
When share forfeiture account is debited the called up value is considered because the company cancel only that amount which is demanded by them not that value which hasn't been demanded yet.

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In case of forfeiture, we debit share capital account by which amount?

\begin{matrix} Date & Particulars & L.F. & Debit (₹) & Credit (₹) Share Capital A/c Dr. & (i) - - - Securities Premium A/c Dr. & 4,000 To Share Forfeiture A/c & 8,000 To Calls in Arrears A/c & 14,000 ( _____ shares forfeited for non-payment of ₹ _(ii)___ including premium of ₹2 per share) - ----------------------------------------------------------------------------------------------------------------- - Bank A/c Dr. & (iii) - -- - Shares Forfeiture A/c Dr. & (iv) - -- - To Share Capital A/c & (v) - -- - ( _______ shares reissued at ₹9 per share, fully paid at ₹10 per share) - ------------------------------------------------------------------------------------------ - Share Forfeiture A/c Dr. & 1,400 To Capital Reserve A/c & 1,400 (Net gain on reissued shares transferred to capital reserve) \end{matrix}

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