A forfeited shares account is:
A) a revenue account.
B) an expense account.
C) a liability account.
D) an asset account.

Question

Quizplus · Accepted Answer

A forfeited shares account is a liability account because it represents the amount paid by shareholders for shares that they failed to fully pay for, and as a result, the shares were forfeited by the company. The account represents the amount of money owed to the shareholders for the forfeited shares, and the company may choose to use this money to cover any outstanding liabilities or to reissue the shares at a later date.

A Forfeited Shares Account Is