The balance of the share forfeiture account is shown in the balance sheet under:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Share capital
The balance of the Share Forfeiture Account represents the amount received from shareholders on the forfeited shares. It is shown under the head “Share Capital” in the balance sheet, added to the paid-up share capital until the forfeited shares are either reissued or cancelled.