In case of forfeiture of share, share forfeiture account is credited with

The correct answer is: A. Money received

Share forfeiture is a process where a company cancels the shares of a shareholder who has failed to pay the full amount of the purchase price. When a share is forfeited, the company debits the share capital account and credits the share forfeiture account with the amount of the unpaid purchase price.

The money received from the forfeiture of shares is usually used to reduce the company’s share capital. However, the company may also choose to use the money to pay off debt or to invest in new projects.

Here is a brief explanation of each option:

• Money due. This option is incorrect because the company does not owe money to the shareholder when a share is forfeited. The shareholder owes money to the company, and the company can only collect this money if the shareholder pays the full amount of the purchase price.
• Equal value. This option is incorrect because the company does not have to credit the share forfeiture account with the full value of the share. The company can only credit the share forfeiture account with the amount of the unpaid purchase price.
• None of the above. This option is incorrect because one of the options is correct. The correct option is A. Money received.