Question :
At the time of the reissue of all forfeited shares
Option 1:
General Reserve is debited with the credit balance left in the Forfeited Shares Account
Option 2: General Reserve is credited with the credit balance left in the Forfeited Shares Account
Option 3:
Capital Reserve is debited with the credit balance left in the Forfeited Shares Account
Option 4:
Capital Reserve is credited with the credit balance left in the Forfeited Shares Account
Correct Answer:
Capital Reserve is credited with the credit balance left in the Forfeited Shares Account
Solution :
Answer = Capital Reserve is credited with the credit balance left in the Forfeited Shares Account
Capital Reserve is credited with the credit balance left in the Forfeited Shares Account.
Entry will be:
Share Forfeiture A/c Dr.
To Capital Reserve A/c
Hence, the correct answer is 4.
