Company Accounts

Share Capital

Easy

common

Discount allowed on re-issue of forfeited shares, will be:-

Debited to the 'Discount on issue of Share Account'

Credited to the 'Share Forfeiture Account'

Credited to the 'Discount on issue of Share Account'

Debited to the 'Share Forfeiture Account'

✅ Correct Option: 4

When forfeited shares are re-issued, any discount allowed on such re-issue is debited to the Share Forfeiture Account.

Understanding the logic:

When shares were originally forfeited, the Share Forfeiture Account was credited with the amount already received from the defaulting shareholder. This account carries a credit balance.

At the time of re-issue, if shares are re-issued at a discount (below their nominal value), this discount is adjusted against the existing credit balance in the Share Forfeiture Account by debiting it.

Journal Entry for re-issue at discount:

Bank A/c Dr.

Share Forfeiture A/c Dr. (Discount amount)

To Share Capital A/c

The Share Forfeiture Account already has a credit balance from the original forfeiture. The discount on re-issue reduces this balance, hence it is debited.

Note: "Discount on Issue of Shares Account" is not used in case of re-issue of forfeited shares. The discount is directly adjusted from the forfeiture proceeds.

Correct Option: 4

2022: 15 July Shift 2

The amount of forfeiture left over after reissue will be

2026: 6 June Shift 1

Which of the following are related to forfeiture of shares issued on premium :

(A) Share capital is debited with called up amount

(B) Calls in Advance is credited

(D) Premium received on such Shares is debited, if it is received

Choose the correct answer from the options given below:

2025: 4 June Shift 2

200 shares of Rs. 100 each issued at a premium of Rs.10 were forfeited for the non-payment of allotment money of Rs. 60 (including premium) per share. The first and final call of Rs. 20 per share on these shares were not made. The forfeited shares were reissued at Rs. 70 per share as fully paid-up. Capital reserve created after reissue will be:

2022: 16 July Shift 2

Identify the correct sequence of steps in the process of Issue of Shares:

A. Making allotment of shares

B. Issue of Prospectus

C. Forfeiture of shares

D. Receiving applications for shares

E. Making calls

Choose the correct answer from the options given below:

2026: 13 May Shift 1

Select the correct statements related to shares and share capital :

(A) Authorized Share Capital and Nominal Share Capital are different from each other.

(B) Equity shares cannot be redeemed during the lifetime of the company.

(D) Equity shares cannot be issued to the public at a discount.

Choose the correct statements from the options given below:

2025: 2 June Shift 2

In the case of under subscription of shares.

Discount allowed on re-issue of forfeited shares, will be:-

Solution

Related questions:

Keyboard Shortcuts

CUET Accountancy Past Year Questions (Topic-Wise)