Accountancy Part AAccounting for Shares

Which of the following is the correct statement in respect of Forfeit…

Which of the following is the correct statement in respect of Forfeited Shares: -

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → These shares can either be cancelled or can be re-issued.

After forfeiture, the directors may cancel the forfeited shares or reissue them. A reissue is not tied to one price: it may be at par, at a premium or at a discount, so every option that says “only” one price is wrong.

NCERT (2026-27 edition):
Reissue of Forfeited Shares – “The directors can either cancel or re-issue the forefeited shares. In most cases, they reissue such shares which may be at par, at premium or at a discount. Forfeited shares may be reissued as fully paid at a par, premium, discount.”