Match List I with List II List I List II A. Share forfeiture I. Reser…

Match List I with List II

List I	List II
A. Share forfeiture	I. Reserve Capital
B. Uncalled Capital	II. Pro-rata allotment
C. Over-subscription	III. Capital Reserve
D. Discount on the issue of shares	IV. Reissue of shares

Choose the correct answer from the options given below.

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → A-III, B-I, C-II, D-IV

A. Share forfeiture — this matches III. Capital Reserve. When forfeited shares are reissued, the balance left in the share forfeiture account on those shares is a capital profit and is transferred to Capital Reserve.

B. Uncalled Capital — this matches I. Reserve Capital. The part of uncalled capital that a company decides to call only on winding up is its reserve capital.

C. Over-subscription — this matches II. Pro-rata allotment. When more shares are applied for than are offered, the directors may allot shares to all applicants in proportion (pro-rata).

D. Discount on the issue of shares — this matches IV. Reissue of shares. Forfeited shares may be reissued at a discount, and that discount is debited to the share forfeiture account; it cannot be more than the amount forfeited on those shares.

NCERT (2026-27 edition):
Termes Used in the Chapter – “… Once all the forfeited shares have been reissued, any credit balance on Share forfeiture account is transferred to Capital Reserve representing profit on forfeiture of shares.”

NCERT (2026-27 edition):
Categories of Share Capital – “… • Reserve Capital: A company may reserve a portion of its uncalled capital to be called only in the event of winding up of the company. Such uncalled amount is called ‘Reserve Capital’ of the company. It is available only for the creditors on winding up of the company.”

NCERT (2026-27 edition):
Over Subscription – “… Second Alternative : When the directors opt to make a proportionate allotment to all applicants (called ‘pro-rata’ allotment), the excess application money received is normally adjusted towards the amount due on allotment.”

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.”