Accountancy Part BFinancial Statements of a Company

Balance in "Calls in Advance" account is shown as a separate item und…

Balance in "Calls in Advance" account is shown as a separate item under the sub head ___________ in company's Balance Sheet.

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Other current liabilities

Calls in Advance is money received before it is called; the company owes it to the shareholder until the call is made, so it is a liability shown under Current Liabilities – Other current liabilities, not added to paid-up capital.

Option (1) Short term borrowings — Incorrect. These are loans repayable within a year.

Option (2) Trade payable — Incorrect. These arise from purchase of goods and services.

Option (4) Short term provisions — Incorrect. These are amounts set aside for known liabilities such as tax.

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.”