Company Accounts

Share Capital

Medium

If the premium amount has not been received, in respect of the shares forfeited, the Securities Premium Reserve Account

will not be mentioned at the time of forfeiture

will be debited at the time of forfeiture

will be credited at the time of forfeiture

will be considered at the time of reissue of shares

✅ Correct Option: 2

When shares are forfeited and the premium amount has not been received, the Securities Premium Reserve Account needs to be debited at the time of forfeiture.

Here's why:

When shares were originally allotted at a premium, the premium was credited to the Securities Premium Reserve Account (whether called immediately or not). If this premium amount was called but the shareholder failed to pay it, the company has a receivable against that premium.

At the time of forfeiture, all amounts that were called but not received must be written off. Since the Securities Premium Reserve Account was already credited when the premium was called, it must now be debited to reverse that entry.

Journal Entry at Forfeiture:

Share Capital A/c Dr. (Called up amount)

Securities Premium Reserve A/c Dr. (Unpaid premium)

To Share Forfeiture A/c (Amount actually received)

To Calls in Arrear A/c (If any balance unpaid)

This ensures that the Securities Premium Reserve Account only reflects the premium actually received from shareholders, not the premium that was merely called but never paid.

2025: 3 June Shift 1

Arrange the following steps in the procedure of share issues in the correct sequence:

(A) Receipt of Applications

(B) Allotment of Shares

(D) Listing on the stock exchange

Choose the correct answer from the options given below:

2025: 30 May Shift 1

Which among the following statements is NOT true

2025: 26 May Shift 2

Balance of share forfeiture account is shown in the balance sheet under the sub-head-

2025: 22 May Shift 1

Which of the following is incorrect about the minimum subscription:

Minimum subscription is the minimum amount that, in the opinion of directors, must be raised to meet the needs of business operations of the company relating to:

2026: 11 May Shift 2

Antra Ltd. invited applications for 30,000 Shares of Rs. 100 each at a premium of Rs. 30 per share payable as follows: On Application Rs. 40 (including Rs.10 premium), On Allotment Rs. 30 (including Rs.10 premium), On First Call Rs. 30, On Second and Final Call Rs. 30 (including Rs.10 premium). Applications were received for 35,000 shares and a pro rata allotment was made. Excess application money was utilized towards the sum due on allotment. Vijaya to whom 60 shares were allotted, failed to pay the allotment money and his shares were forfeited immediately after allotment.

Allotment money not received on Vijaya's shares will be:

2026: 12 May Shift 1

In case of different types of share capital, match List-I with List-II.

List-I	List-II
(A) Authorised Capital	(I) Portion of issued capital that the public agree to take.
(B) Issued Capital	(II) Amount of share capital issued as per Memorandum of Association of the company.
(C) Subscribed Capital	(III) Part of the capital that the company has demanded for payment.
(D) Called-Up Capital	(IV) Part of authorised capital offered to public.

Choose the correct answer from the options given below:

If the premium amount has not been received, in respect of the shares forfeited, the Securities Premium Reserve Account

Solution

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