JAMB Accounting 2020 Objective — Question 40
Question 40 of 40 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2020 Objective paper, with the correct answer and a full explanation.
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40. First accounting entry for shares forfeited is
- A. A. Dr: forfeited share account Cr: cash account
- B. B. Dr: application account Cr: forfeited share accountCorrect
- C. C. Dr: cash account Cr: forfeited share account
- D. D. Dr: forfeited share account Cr: cash account
Explanation
When shares are forfeited, the application for such number of shares will be cancelled. Thus, the proper accounting entry is to debit application account and credit forfeited share account.
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