The correct answer is option 3- (A)-(III), (B)-(I), (C)-(II), (D)-(IV).
| LIST I |
LIST II |
A) Calls in Advance A/c Dr.
To Particular Call A/c |
(III) Calls in advance adjusted with the call money due |
B) Interest on Calls in Advance A/c Dr.
To Sundry Shareholder's A/c |
(I) For Interest due on Calls in Advance |
C) Sundry Shareholder's A/c Dr.
To Bank A/c |
(II) For Interest Paid on Calls in Advance |
D) Bank A/c Dr.
To Calls in Arrears A/c
To Interest on Calls in arrears A/c |
(IV) Calls in arrears received with interest |
A) Calls in Advance A/c Dr.
To Particular Call A/c- (III) Calls in advance adjusted with the call money due.
On the due date of the calls, the amount of ‘Calls in Advance’ is adjusted by the following entry :
Calls in Advance A/c Dr.
To Particular Call A/c
(Calls in advance adjusted with the call money due)
B) Interest on Calls in Advance A/c Dr.
To Sundry Shareholder's A/c- (I) For Interest due on Calls in Advance.
‘Calls in Advance’ is a liability of the company, it is under obligation, if provided by the Articles, to pay interest on such amount from the date of its receipt up to the date when appropriate call is due for payment. A stipulation is generally made in the Articles regarding the rate at which interest is payable. However, if Articles are silent on this account, Table F is applicable which provides for interest on calls in advance at a rate not exceeding 12% per annum. The accounting treatment of interest on Calls in Advance is as follows:
For Interest due-
Interest on Calls in Advance A/c Dr.
To Sundry Shareholder’s A/c
(Interest due on Calls in Advance)
C) Sundry Shareholder's A/c Dr.
To Bank A/c- (II) For Interest Paid on Calls in Advance.
‘Calls in Advance’ is a liability of the company, it is under obligation, if provided by the Articles, to pay interest on such amount from the date of its receipt up to the date when appropriate call is due for payment. A stipulation is generally made in the Articles regarding the rate at which interest is payable. However, if Articles are silent on this account, Table F is applicable which provides for interest on calls in advance at a rate not exceeding 12% per annum. The accounting treatment of interest on Calls in Advance is as follows:
For Interest due-
Interest on Calls in Advance A/c Dr.
To Sundry Shareholder’s A/c
(Interest due on Calls in Advance)
For Interest Paid-
Sundry Shareholder’s A/c Dr.
To Bank A/c
(Interest paid)
D) Bank A/c Dr.
To Calls in Arrears A/c
To Interest on Calls in arrears A/c- (IV) Calls in arrears received with interest.
On receipt of the call amount together with interest, the amount of interest shall be credited to interest account while call money shall be credited to the respective call account or to calls in arrears account. When the shareholder makes the payment of calls in arrears together with interest, the entry will be as follows:
Bank A/c Dr.
To Calls in Arrears A/c
To Interest on Calls in Arrears A/c | 
