Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Financial Statements of a Company

Question:

Calls in advance is shown as in the Company's Balance Sheet.

Options:

Non-Current Liability

Current Liability

Part of Share Capital

Current Assets

Correct Answer:

Current Liability

Explanation:

The correct answer is Option (2) → Current Liability

"Calls in advance" refers to amounts received from shareholders in excess of the calls made on their shares. This is a liability for the company. Calls in advance would be shown on the liabilities side of the balance sheet under current liabilities until the calls are actually made, and the liability is discharged.