Class 12 Accountancy - HARYANA
Accounting for Share Capital
Accounting for Share Capital is a foundational chapter in Class 12 Accountancy under the Haryana (BSEH) curriculum. It deals with how joint-stock companies raise capital by issuing shares to the public. Students will learn the accounting treatment for the issuance and forfeiture of equity and preference shares, including calls-in-arrears, calls-in-advance, and over-subscription. This chapter is heavily numerical-focused and is crucial for scoring high marks in the board examination, often featuring long-answer questions on comprehensive journal entries and the preparation of the Balance Sheet.
Start Learning FreeKey Concepts
Share Capital
The total amount of capital raised by a company by issuing shares to the public, divided into units of fixed value.
Over-subscription and Under-subscription
Over-subscription occurs when applications are received for more shares than offered, requiring pro-rata allotment or refunds. Under-subscription happens when applications are fewer than offered shares.
Calls-in-Arrears and Calls-in-Advance
Calls-in-arrears represent the amount not paid by shareholders when a call is made, while calls-in-advance refer to money paid by shareholders before it is formally called up.
Forfeiture of Shares
The cancellation of shares due to non-payment of call money by a shareholder, resulting in the forfeiture of the amount already paid.
Reissue of Forfeited Shares
The process by which a company resells the shares it has previously forfeited, which can be done at par, premium, or discount (up to the amount forfeited).
Important Formulas
Board Exam Info
Under the Haryana Board (BSEH) Class 12 Accountancy exam, this chapter typically carries significant weight (around 10 to 15 marks). Questions usually include 1-mark objective questions, 3 or 4-mark short numericals on forfeiture and reissue, and a compulsory 6 or 8-mark long-answer question involving journal entries for the full cycle of share issue and forfeiture.
Frequently Asked Questions
What is the difference between pro-rata allotment and full allotment?
Full allotment means applicants get the exact number of shares they applied for. Pro-rata allotment means applicants receive a proportionate number of shares when the issue is over-subscribed.
Can forfeited shares be reissued at a discount?
Yes, forfeited shares can be reissued at a discount, but the maximum discount allowed cannot exceed the amount that was already forfeited on those specific shares.
How is Securities Premium shown in the Balance Sheet?
Securities Premium is shown under the head 'Equity and Liabilities' under the sub-head 'Reserves and Surplus'.
Learn Accounting for Share Capital with Your AI Tutor
10 different ways to study this chapter. Free for 3 chapters per day.
Lecture
Key Points
Interactive
Quiz
Flashcards