Select the features from the following which are related to Calls in Arrears:
(A) It reduces the paid-up capital
(B) It is debited where a company maintains its account.
(C) It increases liability
(D) It is shown on Asset side of the Balance Sheet
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) and (B) only
Calls in Arrears is the amount called up but not yet paid by shareholders. It is money still due to the company.
(A) It reduces the paid-up capital Correct. Paid-up capital is the called-up capital minus calls in arrears, so unpaid calls lower it.
(B) It is debited where a company maintains its account. Correct. Where a separate account is kept, Calls in Arrears A/c is debited and the call accounts are credited with the unpaid amount.
(C) It increases liability Incorrect. It is an amount owed to the company, not by it, so it adds nothing to the company’s liabilities.
(D) It is shown on Asset side of the Balance Sheet Incorrect. It is deducted from subscribed capital in the Share Capital note, on the Equity and Liabilities side; it is not shown as an asset.
NCERT (2026-27 edition):
NCERT (2026-27 edition): |
