Question

If shares are forfeited, share capital account is debited with _________________.

• A. the face value of shares.
• B. the called up value of shares.
• C. the paid up value of shares.
• D. None of the above

Answer 1

The correct option is B the called up value of shares.

The company debits the Share Capital Account with the amount called-up up to the date of forfeiture on shares. It credits the Shares Allotment Amount or Shares Call Account with amount called-up on forfeited shares but due from the shareholders.