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Forfeiture of… (Class 12 Accountancy SQP 2024-25, Q3a)

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AccountancyCBSE Class 12 · Sample paper, session 2024-25 · 1 mark · MCQ

CBSE Class 12 Accountancy sample paper 2024-25: question 3(a)

From the official CBSE sample question paper for 2024-25, section A, question 3(a), for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q3(a) · 1 mark · MCQAccounting for Share Capital

Forfeiture of shares leads to reduction of _________________Capital.

  1. (A)Authorised
  2. (B)Issued
  3. (C)Subscribed
  4. (D)Called up

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Does forfeiture change the number of shares the company is allowed to issue?

Hint 2

Whose subscription is cancelled on forfeiture?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Forfeited shares stop being held by a subscriber; the company cancels the amount called on them from share capital.

  2. So forfeiture reduces the subscribed capital, while authorised and issued capital stay as they were. Option (C).

    1 mark

Answer: (C) Subscribed

Where the marks are

  • Forfeiture cancels subscribed shares (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Accounting for Share Capital, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.