Which of the following is transferred to Capital reserve?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- Profit on forfeiture of shares.
Profit on forfeiture of shares is transferred to Capital reserve.
When shares are forfeited and reissued, any amount left in the share forfeiture on those shares is transferred to the Capital Reserve. This profit is not part of regular business operations but is instead a result of the share forfeiture process.