If the loss on reissue of shares is less than the amount forfeited, the ‘surplus’ or profit is transferred to which account?

Capital Reserve

The correct answer is option 1- Capital Reserve.

If the loss on reissue of shares is less than the amount forfeited, the 'surplus' or profit is typically transferred to the "Capital Reserve" account. Capital Reserve is a type of reserve account used to record profits or surpluses that are not distributable as dividends to shareholders.