Assertion (A): Maximum amount of discount allowed at the time of reissue of forfeited shares should not exceed the forfeited amount. Reason (R): The excess amount of forfeited shares account is transferred to capital reserve account. In the context of the above statements, identify the correct option.

Question

KollegeApply · Accepted Answer

Both (A) and (R) correct. Explanation: Assertion (A): True – On reissue, the discount cannot exceed what the company has already received on those forfeited shares. Reason (R): True – After reissue, the balance left in the forfeited shares account is treated as capital profit and transferred to Capital Reserve.

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