Question

If a share of Rs. 10 on which Rs. 8 is called -up and Rs. 6 paid is forfeited, the Share Capital Account will be debited with _________.

• A. Rs. 10
• B. Rs. 8
• C. Rs. 6
• D. Rs. 4

Answer 1

Answer: (B)

Rs. 8

Shares are issued at a face value against which a certain amount is called up. The called up amount is credited to share capital account.

Once the shares are forfeited, a reversal entry need to be passed in books of account by debiting the share capital account by the amount of called up amount.