Forfeiture of Shares

shareholders fail to pay one or more instalments, viz. allotment money and/or call money. In such circumstances, the company can forfeit their shares, i.e. ...........

• call their allotment

• cancel their allotment

• renewable allotment

• revise allotment

When shares are forefeited all entries relating to the shares forfeited except those relating to...................., already recorded in the accounting records must be reversed.

• calls

• application

• allotment

• premium

share capital account is ............... with the amount called-up in respect of shares are forfeited

• credited

• debited

• can be debited or credited

• none of them

unpaid calls accounts or calls in arrears account with the amount already received should be .................

• debited

• credited

• can be debited or credite

• none of above

Share Capital A/c(..............) Dr.

To Share Forfeiture A/c

To Share Allotment A/c

To Share Calls A/c (individually)

• Unpaid up amount

• Paid up amount

• Called up amount

• none of above

Share Capital A/c Dr.

To Share Forfeiture A/c(....................)

To Share Allotment A/c

To Share Calls A/c (individually)

(Fill in the blanks ............)

• Paid up amount

• Unpaid up amount

• Called up amount

• None of above

The balance of shares forfeited account is shown as an addition to the total paid-up capital of the company under the head ‘.....................’ under title ‘Equity and Liabilities’ of the Balance Sheet till the forfeited shares are reissued.

• paid-up capital

• shares forfeited

• Balance Sheet

• Share Capital

A company forfeited 2,000 shares of 10 each (which were issued at par) held by Mr. John for non-payment of allotment money of 4 per share. The called up value per share was 9. On forfeiture, the amount debited to share capital = ?

• 10,000

• 8,000

• 2,000

• 18,000

Who are the real owners of a company?

• Government

• Board of Directors

• Equity shareholders

• Debentureholders

A Company is created by

• Special act of the Parliament

• Companies Act

• Investors

• Members