balance of share forfeiture account is shown in liabilities side of balance sheet as : - a) share capital. b) reserve & surplus c)provision for current liabilities d)none of these
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The share forfeited A/c is shown in the liabilities side in Balance Sheet under the heading 'share capital'. It is added to paid up capital until all the forfeited shares are not re-issued.
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The correct answer is B
Explanation:
- Share forfeited is defined as the share in the company which the owner loses or forfeits through failing to meet or fulfill the requirements of purchase.
- And the requirement might include or involve paying call money owed or an allotment or to transfer the shares during the restricted period.
- The shares forfeited will be recorded under the head of Reserve and Surplus in the balance sheet (liability side).The shares forfeited is established when the company cancels the shares of the shareholder due to non- payment of call money or allotment money.
- It is the capital gain for the business and therefore shown on the reserve and surplus account.
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