Accounting · Accounting for Share Capital
When forfeited shares are reissued at a discount, what is the maximum permissible limit for the loss on reissue, and to which account is it debited?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1There is no legal restriction as long as the company has Capital Reserve.
- 2Restricted to the amount of calls in arrears and debited to General Reserve Account.
- 3Restricted to the amount already received on such shares and debited to Forfeited Shares Account.✓
- 4Restricted to 10% of face value and debited to Securities Premium Account.
Correct answer
Restricted to the amount already received on such shares and debited to Forfeited Shares Account.
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