Question:medium

If all the forfeited shares are reissued, the balance, if any, left in the Forfeited Shares Account is transferred to:

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When forfeited shares are reissued, the balance in the Forfeited Shares Account is usually transferred to the Capital Reserve Account.
Updated On: Jan 13, 2026
  • General Reserve Account
  • Securities Premium Account
  • Capital Reserve Account
  • Statement of Profit and Loss
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The Correct Option is C

Solution and Explanation

Upon reissuance of forfeited shares, the residual balance in the Forfeited Shares Account is moved to the Capital Reserve Account. This occurs because any surplus remaining after accounting for unpaid calls on these forfeited shares is classified as capital profit and is subsequently transferred to the Capital Reserve. Consequently, the remaining balance from the Forfeited Shares Account is allocated to the Capital Reserve Account.
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