Question

The balance of the share forfeiture a/c after the reissue of forfeited shares is transferred to
a) Capital Redemption Reserve A/c
b)Capital Reserve
c) General Reserve
d)Profit and loss A/c​

Answer 1

Normally, the forfeited shares are reissued as fully paid and at a discount. 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.