Question

On forfeiture of shares, which of the following account is credited with the amount of money already received on such shares?

• A. Shares forfeited a/c
• B. Share capital a/c
• C. Unpaid calls a/c
• D. Share premium a/c

Answer 1

Answer: (A)

Shares forfeited a/c

At the time of forfeiture of share, all accounting entries must be reversed. The amount which is already received will be transferred to share forfeited account.