Accountancy Part AAccounting for Shares

Balance of share forfeiture account is shown in the balance sheet und…

Balance of share forfeiture account is shown in the balance sheet under the sub-head-

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Share capital

The amount in Share Forfeiture Account is money already received on shares that were later forfeited. Until those shares are reissued, it is shown as an addition to the paid-up capital under Share Capital in the notes to accounts; it is not a reserve, a liability or a loan.

NCERT (2026-27 edition):
Forfeiture of Shares – “… The balance of shares forfeited account is shown as an addition to the total paid-up capital of the company under the head ‘Share Capital’ under title ‘Equity and Liabilities’ of the Balance Sheet till the forfeited shares are reissued.”