Problem Solving: Issue of Shares and Share Forfeiture

The video tutorial focuses on problem-solving related to company accounts and the issue of shares. It covers the process of share forfeiture, including practical examples and common mistakes. The session concludes with final entries and balance sheet extraction, providing tips for effective problem-solving in share issues.

What is the main focus of today's session?

• Problem-solving of company accounts and issue of shares

• Introduction to debentures

• Learning about taxation

• Understanding financial statements

In the context of share issuance, what does 'forfeiture' mean?

• Issuing new shares at a discount

• Increasing the share capital

• Paying dividends to shareholders

• Canceling shares due to non-payment

What happens to the capital when shares are forfeited?

• It decreases

• It remains the same

• It is transferred to reserves

• It increases

What is the significance of the prospectus in share forfeiture?

• It determines the share price

• It is used to calculate dividends

• It guides the process of share forfeiture

• It is a legal requirement for all companies

What is the correct entry for share capital when shares are forfeited at an earlier stage?

• Credit with the paid-up amount

• Debit with the called-up amount

• Debit with the face value

• Credit with the face value

What is the role of the 'share forfeiture account' in journal entries?

• It is a balancing figure

• It is used to record discounts

• It represents the paid-up amount by the shareholder

• It is used to record premiums

What should be ensured in all journal entries according to the session?

• All entries are made at a discount

• Entries are made in chronological order

• Entries are made in alphabetical order

• Debit equals credit