transferred to Goodwill A/c
transferred to Capital Reserve A/c
shown as Share Forfeiture A/c
added to paid-up capital
Answer is Right!
Answer is Wrong!
The correct answer is: B. transferred to Capital Reserve A/c.
Share forfeiture account is a temporary account that is used to record the amount of money that has been forfeited by shareholders who have failed to pay the full amount of their subscription. When all of the forfeited shares are reissued, the balance in the share forfeiture account is transferred to the capital reserve account.
The capital reserve account is a type of reserve account that is used to record the amount of money that has been set aside for a specific purpose. In the case of share forfeiture, the money in the capital reserve account can be used to pay for the costs of reissuing the forfeited shares.
The other options are incorrect because:
- Option A is incorrect because goodwill is an intangible asset that is not related to share forfeiture.
- Option C is incorrect because the share forfeiture account should not be shown as a separate account after the forfeited shares have been reissued.
- Option D is incorrect because the balance in the share forfeiture account is not added to paid-up capital.