Balance of Share Forfeiture account is shown in the Balance Sheet under the item: -

The correct option is Share Capital.

Concept and Explanation:
Share forfeiture occurs when a shareholder fails to pay the allotment or call money on their shares within the specified time, leading the company to cancel their membership and forfeit the shares. The amount already paid by the defaulting shareholder is not refunded; instead, it is retained by the company and transferred to a separate account known as the Share Forfeiture Account.

Until these forfeited shares are reissued to another buyer, the balance in the Share Forfeiture Account represents a part of the capital received by the company. According to corporate accounting standards, this balance must be shown in the Balance Sheet by adding it to the paid-up share capital under the main heading Share Capital (specifically under 'Subscribed Capital' in the Notes to Accounts).

Once the forfeited shares are reissued, any surplus remaining in the Share Forfeiture Account is transferred to the 'Capital Reserve' account, which is then presented under 'Reserves and Surplus'. However, prior to their reissue, the balance is strictly presented under Share Capital.