Calls in Arrears represent :
(A) The debit balance of allotment or all the calls account.
(B) The credit balance of allotment or all the calls account.
(C) Shareholders failed to pay amount due on allotment or on any of the calls, on due date.
(D) Such amount shall appear as Current Asset.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A) and (C) only
Calls in arrears is the amount a shareholder has failed to pay on allotment or on a call by the due date.
(A) The debit balance of allotment or all the calls account. Correct. The call account is debited with the whole amount due; what is not received stays there as a debit balance.
(B) The credit balance of allotment or all the calls account. Incorrect. A credit balance would mean the company received more than was due, which is calls in advance. Calls in arrears is money not yet received, so it leaves a debit balance.
(C) Shareholders failed to pay amount due on allotment or on any of the calls, on due date. Correct. This is the meaning of calls in arrears.
(D) Such amount shall appear as Current Asset. Incorrect. It is not an asset. It is shown in the Notes to Accounts as a deduction from the subscribed capital, to arrive at the paid-up figure.
NCERT (2026-27 edition): |