Company Accounts: Issue of Shares

Quick answer

In-depth NCERT Class 12 Accountancy revision guide for Company Accounts: Issue of Shares. Covers complete theory, solved numerical examples, CBSE step-marking breakdowns, and high-yield board examination questions.

Key points

Master core concepts of Share Capital Classification & Terminology with official CBSE definition standards.
Master core concepts of Pro-Rata Allotment and Journal Entries with official CBSE definition standards.
Master core concepts of Forfeiture of Shares Issued at Par: with official CBSE definition standards.
Master core concepts of Reissue of Forfeited Shares & Transfer to Capital Reserve: with official CBSE definition standards.

Use these notes alongside your current textbook. Check important formulas, worked answers and syllabus coverage with your teacher or official learning material.

Authorised / Nominal Capital: Maximum capital stated in Memorandum of Association.
Issued Capital: Portion offered to public for subscription.
Called-up & Paid-up Capital: Amount called and actually received from shareholders.

Pro-Rata Allotment and Journal Entries

When shares are over-subscribed, allotment is made proportionately. Surplus application money is adjusted towards allotment and calls.

Forfeiture of Shares Issued at Par:

Share Capital A/c (Called-up amount)                     Dr.
    To Share Allotment A/c (Unpaid allotment)
    To Share Calls A/c (Unpaid calls)
    To Forfeited Shares A/c (Amount actually received on capital)

Reissue of Forfeited Shares & Transfer to Capital Reserve:

Bank A/c (Reissue price received)                        Dr.
Forfeited Shares A/c (Discount on reissue, if any)       Dr.
    To Share Capital A/c (Face value paid up)

(Transfer of net profit on reissue):
Forfeited Shares A/c                                     Dr.
    To Capital Reserve A/c

Frequently asked questions

What is the central theme and board exam focus of Company Accounts: Issue of Shares?

Examiners test your analytical grasp of the core message, contextual vocabulary, and character motives. Always refer directly to textual quotes or principles to support your interpretations.

How can I avoid losing marks in analytical questions from Company Accounts: Issue of Shares?

Maintain grammatical precision, avoid informal phrasing, and structure responses with clear introductory statements, evidence paragraphs, and thoughtful conclusions.

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