If the premium on forfeited shares has already been received, then the securities premium reserve account should be.................... at the time of forfeiture of shares.
Answer & explanation
Correct answer: option 4
The correct answer is option 4- No treatment.
In case securities premium has been duly received on the shares to be forfeited, the Securities Premium Reserve Account already credited at the time of making call/allotment will not be cancelled at the time of forfeiture of shares. Therefore, securities premium reserve account is neither debited nor credited at the time of forfeiture of shares.