Match List I with List II
| List I (Name of account to be debited or credited, when shares are forfeited) |
List II (Amount to be debited or credited) |
| A. Share Capital Account | I. Debited with amount not received |
| B. Share Forfeited Account | II. Credited with amount not received |
| C. Calls-in-arrears Account | III. Credited with amount received towards share capital |
| D. Securities Premium Account | IV. Debited with amount called up |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 2
The correct answer is option 2- A-IV, B-III, C-II, D-I.
| List I (Name of account to be debited or credited, when shares are forfeited) |
List II (Amount to be debited or credited) |
| A. Share Capital Account | IV. Debited with amount called up |
| B. Share Forfeited Account | III. Credited with amount received towards share capital |
| C. Calls-in-arrears Account | II. Credited with amount not received |
| D. Securities Premium Account | I. Debited with amount not received |
Share Capital Account- Debited with amount called up: When shares are forfeited, the company debits share capital by the amount that was called up. Only calledup amount related to shares are debited.
Share Forfeited Account- Credited with amount received towards share capital. The Share Forfeited Account records any proceeds received from shareholders before forfeiture on account of share capital.
Calls-in-arrears Account- Credited with amount not received. This account is prepared for the unpaid amount from shareholders who didn't fulfill their call obligations. On the forfeited shares, this account is credited with the amount that is not paid by shareholders.
Securities Premium Account- Debited with amount not received. The Securities Premium Account is debited with the amount of premium not received from shareholders. If premium is received and then there is no use of securities premium in case of forfeiture.