Identify the statement that is/are not true from the following.(a) Shares can be forfeited for non payment of call money.(b) The profit on forfeited shares is transferred to capital reserve.(c) Balance of share forfeiture account is shown in the balance sheet under reserves and surplus.(d) Application money should be at least 10% of the face value of the share.Choose the correct answer from the options given below:
- A(a) only
- B(c) only
- C(c), (d) only
- D(b), (d) only
Solution & Step-by-step Explanation
Statement (c) is false because the balance of the share forfeiture account (for shares not yet reissued) is shown as an addition to the subscribed capital, not under Reserves and Surplus. Statement (d) is false as per SEBI guidelines, application money should be at least 25% of the issue price (or 5% of nominal value as per Companies Act). Hence (c) and (d) are not true.