Question

On forfeiture of shares amount already paid by the member is forfeited and credited to a separate account namely------
​

Answer 1

Answer:

Share Forfeiture A/c – credited with the amount already paid by the defaulter

Answer 2

On the forfeiture of shares, the amount already paid by the member is forfeited and credited to a separate account, namely "Share forfeiture account."

Features of the "share forfeiture account":

• A company issues shares to gain capital from the public.
• The people who buy these shares are called shareholders of a company. These shareholders have to pay the amount based on the called-up value of the shares they own.
• Sometimes, these shareholders are unable to pay the called-up value of their shares at the time the company has made the call.
• If after notice from the company, they are still unable to pay the amount, then their shares are "forfeited."
• Forfeiting shares means canceling the shares. The amount already paid by the shareholder/member is transferred to a separate account, namely "Share forfeiture account."