Question

State, whether the following statements are True or False.

Forfeited shares are reissued at par only.

Answer 1

False

Explanation: Forfeited shares can be issued at par, at a discount or at a premium, as decided by the board of directors. The forfeited amount is transferred to Share Forfeiture Account. However, when the forfeited shares are reissued, the balance amount is transferred to the Capital Reserve Account.