Can you explain the answer of this question below:Share Forfeiture account is a:A:Personal AccountB:Fictitious AssetC:Nominal AccountD:Misc. ExpenditureThe answer is a.

Question

Answer

Forfeited share is a personal account

Answer

Share Forfeiture Account represents the amount of share capital that a shareholder had already paid before making any default in payment of calls consequent to which such forfeiture took place. since it is money paid by a shareholder n it represents it so it is a personal account

Answer

Because if u not paid the amount on calls then the amount is forfeited which  amount  you paid. so it is credit in your personal account.

Answer

Share Forfeiture account is a Personal Account.

Personal accounts are accounts that represent individuals or entities with whom a business has a direct relationship. These accounts include accounts of persons, firms, or companies to whom the business owes money or from whom it is due.

Explanation:

When a company issues shares to the public, it expects to receive the full payment for those shares. However, sometimes shareholders fail to pay the full amount due on their shares, leading to the forfeiture of the shares.

Share Forfeiture Account:

The Share Forfeiture Account is created to record the amount due from shareholders who have failed to pay the full amount for their shares and have subsequently forfeited their shares. This account is used to keep track of the amount receivable from these shareholders.

Example:

Let's say a company issued 1,000 shares at $10 each, with a requirement to pay $5 upon application and $5 on allotment. However, 100 shareholders failed to pay the $5 on allotment, resulting in the forfeiture of their shares.

In this case, the Share Forfeiture Account will be created to record the $500 due from these shareholders. The Share Forfeiture Account will be debited with the amount due from the shareholders who failed to pay, and the corresponding entry will be made in the respective shareholder's account.

Impact on Shareholder's Equity:

The forfeiture of shares leads to a reduction in the shareholder's equity. The Share Forfeiture Account represents the amount receivable from the shareholders, which is deducted from the issued share capital in the shareholder's equity section of the balance sheet.

Accounting Treatment:

The accounting treatment for the Share Forfeiture Account involves debiting the Share Forfeiture Account and crediting the respective shareholder's account. This reduces the amount payable by the shareholders and reflects the forfeiture of their shares.

Conclusion:

The Share Forfeiture Account is a personal account that represents the amount receivable from shareholders who have failed to pay the full amount for their shares and have subsequently forfeited their shares. It is used to keep track of the amount due from these shareholders and has an impact on the shareholder's equity.

Answer

Personal or nominal...clear it properly plz

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