Accountancy Part BFinancial Statements of a Company

Calls in advance is shown as __________ in the Company's Balance Shee…

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

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Current Liability

Calls in advance is money the company owes back to the shareholder until the call is due, so it is a liability, shown under current liabilities as ‘other current liabilities’ and not added to paid-up capital.

NCERT (2026-27 edition):
Calls in Advance – “… The balance in ‘Calls in Advance’ account is shown as a separate item under the title Equity and Liabilities in the company’s balance sheet under the head ‘current liabilities’, as sub-head ‘others current liabilities’. It is not added to the amount of paid-up capital.”