# Accounting for Share Capital, Class 12 Accountancy | SwaVid Accounting for Share Capital, NCERT Class 12 Accountancy: notes with key ideas, formats, common mistakes and 3 quick checks with worked answers. Canonical: https://www.swavid.com/cbse/class-12/accountancy/chapter/accounting-for-share-capital Source: https://www.swavid.com/cbse/class-12/accountancy/chapter/accounting-for-share-capital # Accounting for Share Capital ## Definitions, formats and formulas ## Key ideas ## Common mistakes ## Quick checks ## Keep going ## Questions parents ask ## Class 12 Accountancy on SwaVid ### Nature and types of companies ### Categories of share capital ### Issue of shares at par and premium ### Over-subscription and pro-rata allotment ### Calls-in-arrears and calls-in-advance ### Forfeiture and reissue of shares ### Next chapter ### Related chapter ### Related chapter ### All chapters SwaVid › CBSE › Class 12 › Accountancy › Accounting for Share Capital Notes written by SwaVid from the NCERT textbook. Class 12 Accountancy, NCERT Accountancy Part II: companies, analysis and cash flow. Key ideas, definitions and common mistakes. CBSE does not print marks for a single chapter. Short answer. This chapter explains the nature of a joint stock company and the accounting treatment for the issue, forfeiture, and reissue of shares. Students learn how to record share transactions, handle calls in arrears and advance, and present share capital in a company balance sheet. Source: NCERT Accountancy Part II: companies, analysis and cash flow (Reprint 2026-27) , Accounting for Share Capital A company is an artificial person created by law, having a separate legal entity, perpetual succession, and a common seal. Companies are mainly classified into private companies, public companies, and one person companies based on membership and transferability of shares. Share capital is divided into authorised capital, issued capital, subscribed capital, called-up capital, and paid-up capital. In the balance sheet, subscribed capital is further shown as subscribed and fully paid-up, or subscribed but not fully paid-up. Shares can be issued at their nominal face value or at a premium above face value. Securities premium is credited to a separate Securities Premium Account and can only be used for purposes specified under Section 52(2) of the Companies Act, 2013. When applications exceed the shares offered, the company may reject excess applications, make a full allotment to some, or make a proportional pro-rata allotment. Surplus application money received on pro-rata allotment is adjusted against allotment and subsequent calls. Calls-in-arrears represents the unpaid amount on allotment or calls by shareholders. Calls-in-advance is money received by the company before the call is made, on which interest can be paid up to 12% per annum as per Table F. When a shareholder fails to pay dues, the company can forfeit their shares after proper notice, cancelling their membership. Forfeited shares may be reissued at par, premium, or discount, provided the discount does not exceed the amount forfeited on those shares. Try each question first. Then tap it to see the answer. Called-up amount = 100 * ₹ 8 = ₹ 800 Unpaid call amount = 100 * ₹ 2 = ₹ 200 Amount received and forfeited = 100 * (₹ 8 - ₹ 2) = ₹ 600 ₹ 600 Discount allowed on reissue = 60 * (₹ 10 - ₹ 6) = ₹ 240 Forfeited amount available on 60 shares = ₹ 420 Transfer to Capital Reserve = ₹ 420 - ₹ 240 = ₹ 180 ₹ 180 Excess applications = 50,000 - 40,000 = 10,000 shares Surplus application money received = 10,000 * ₹ 3 = ₹ 30,000 Total allotment due = 40,000 * allotment rate (sufficient to absorb ₹ 30,000) Surplus adjusted on allotment = ₹ 30,000 ₹ 30,000 Issue and Redemption of Debentures . Financial Statements of a Company . Analysis of Financial Statements . The 10 chapters of Class 12 Accountancy . CBSE does not give marks to one chapter. It prints marks for units or parts, and the chapter list page shows them all. No. They are written by SwaVid from the NCERT textbook. The CBSE curriculum is the reference for what is assessed. Issue and Redemption of Debentures. SwaVid is an AI tutor for Indian students in Classes 6 to 12. It finds the earlier ideas a child missed, then teaches today’s chapter. Start free to see how it works. - NCERT NCERT book, Class 12 - 80 marks, theory paper - 3 quick checks - Debiting securities premium on forfeiture even when it was already received . Do not debit Securities Premium Account if the premium amount has already been received from the shareholder prior to forfeiture. - Multiplying the total face value instead of called-up value when debiting share capital on forfeiture . Debit Share Capital Account only with the called-up amount per share on the forfeited shares, not the nominal face value. - Transferring the entire share forfeiture balance to capital reserve before all forfeited shares are reissued . Transfer the surplus to Capital Reserve only for the shares actually reissued. The remaining balance stays in Share Forfeiture Account. - Adding share forfeiture account to reserves and surplus in the balance sheet . Add the balance of Share Forfeiture Account to subscribed share capital under the head Share Capital in the balance sheet. ## Key Links - [CBSE](https://www.swavid.com/cbse) - [Class 12](https://www.swavid.com/cbse/class-12) - [Accountancy](https://www.swavid.com/cbse/class-12/accountancy/chapters) - [Start free →](https://www.swavid.com/signup) - [All 10 chapters](https://www.swavid.com/cbse/class-12/accountancy/chapters) - [NCERT Accountancy Part II: companies, analysis and cash flow (Reprint 2026-27)](https://ncert.nic.in/textbook.php?leac2=0-6) - [Open notes](https://www.swavid.com/cbse/class-12/accountancy/chapter/issue-and-redemption-of-debentures) - [Open notes](https://www.swavid.com/cbse/class-12/accountancy/chapter/financial-statements-of-a-company) - [Open notes](https://www.swavid.com/cbse/class-12/accountancy/chapter/analysis-of-financial-statements) - [Class 12 Accountancy](https://www.swavid.com/cbse/class-12/accountancy/chapters) - [Start free →](https://www.swavid.com/signup)