Class 12 Accountancy - RAJASTHAN
Accounting for Share Capital
The chapter Accounting for Share Capital introduces Class 12 Rajasthan Board (RBSE) students to the fundamental concepts of corporate accounting. It covers the issuance and forfeiture of shares, re-issue of forfeited shares, and presentation of share capital in company balance sheets according to the Companies Act, 2013. This chapter is a core building block for your Accountancy board exam, frequently featuring high-weightage numerical problems on journal entries for oversubscription, calls-in-arrears, and pro-rata allotment, making a strong grasp of journal entries essential for securing top marks.
Start Learning FreeKey Concepts
Share Capital
The total capital raised by a company by issuing shares to the public, categorized into authorized, issued, subscribed, called-up, and paid-up capital.
Pro-Rata Allotment
A proportionate allotment of shares to applicants when an issue is oversubscribed, adjusting excess application money towards allotment and future calls.
Calls-in-Arrears
The amount called by the company on shares but not yet paid by the shareholders, shown as a deduction from subscribed capital.
Forfeiture of Shares
Cancellation of shares due to non-payment of allotment or call money, resulting in the forfeiture of the amount already paid by the shareholder.
Re-issue of Forfeited Shares
The process by which a company re-issues the shares it has previously forfeited, which can be done at par, premium, or discount.
Important Formulas
Board Exam Info
In the Rajasthan (RBSE) Class 12 Accountancy board examination, 'Accounting for Share Capital' typically carries a high weightage of around 10 to 15 marks. Questions usually include a mix of multiple-choice questions, short-answer conceptual questions, and a mandatory 6 to 8-mark long numerical question involving journal entries for issue, forfeiture, and re-issue of shares.
Frequently Asked Questions
What is the difference between Calls-in-Arrears and Calls-in-Advance?
Calls-in-arrears is the unpaid amount demanded by the company on shares, whereas calls-in-advance is the money paid by shareholders before it has actually been called up by the company.
Can forfeited shares be re-issued at a discount?
Yes, forfeited shares can be re-issued at a discount, but the maximum discount allowed cannot exceed the amount that was originally forfeited on those specific shares.
How is Securities Premium Reserve shown in the Balance Sheet?
Securities Premium Reserve is shown under the head 'Equity and Liabilities' under the sub-head 'Reserves and Surplus'.
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