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 amount in the Share Forfeiture Account is money already received on shares that have been cancelled. Until those shares are reissued, it is added to the paid-up capital under the head Share Capital; it is neither a reserve nor a liability.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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