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easyMCQCUET Accountancy 2025 30 May Shift 22026Accountancy
1 mark

Discount allowed on re-issue of forfeited shares, will be:

  1. A
    Debited to the 'Discount on issue of Share Account'
  2. B
    Credited to the 'Share Forfeiture Account'
  3. C
    Credited to the 'Discount on issue of Share Account'
  4. D
    Debited to the 'Share Forfeiture Account'

Solution & Step-by-step Explanation

When forfeited shares are re-issued at a discount, the loss or discount allowed cannot exceed the amount previously collected on those shares. This discount is adjusted by debiting the 'Share Forfeiture Account'.The journal entry is:


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Discount allowed on re-issue of forfeited shares, will be:
A
Debited to the 'Discount on issue of Share Account'
B
Credited to the 'Share Forfeiture Account'
C
Credited to the 'Discount on issue of Share Account'
D
Debited to the 'Share Forfeiture Account'

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Company AccountsShare CapitalRe-issue of Forfeited Shares

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