Question

Question 7:
The profit on the issue of forfeited shares are
transferred to--
Capital alc
Capital reserve a/c
P&L a/c
General Reserve​

Answer 1

Answer:

Normally, the forfeited shares are reissued as fully paid and at a discount. The amount of discount allowed cannot exceed the amount that had been received on forfeited shares on their original issue, and should be debited to the 'Share Forfeited A/c'. The balance, if any, left in Share Forfeited A/c, in respect of shares reissued , should be treated as capital profit and transferred to Capital Reserve A/c.