Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

What are the subsequent instalments of capital, after allotment, referred to as?

Options:

Initial calls

Primary installments

First call, second call, etc.

Allotment calls

Correct Answer:

First call, second call, etc.

Explanation:

After the initial allotment of shares, the subsequent installments of capital that shareholders are required to pay are typically referred to as "calls." These calls are divided into different stages based on the order in which they are made. Each stage is labeled as "first call," "second call," and so on, with the term "call" indicating the demand for shareholders to pay the respective installment. For example, after the allotment of shares, the company may issue a "first call" for payment of a certain portion of the total share value. Once this payment is collected, the company may issue a "second call" for the next installment, and so forth, until all the required payments have been made by shareholders.