Assistant manager finance
186 Points
Joined November 2009
Originally posted by : Marilyn |
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Can You tell me that why share forfeiture a/c is a liability a/c.But it is given in my book that share forfeitured a/c is shown on the liablities side by adding to the paid up share capital ,untill these shares are re-issued.Can you sir,Pls explain me these lines. |
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In the case of share forfeiture, the company wil be under an obligation to re-issue the share.
Share forefeitured A/c is a liability because it is an amount received by the company (Like a Fund). It is required to be disclosed by adding to the paid up share capital because it is prescribed by the companies act.