Match List - I with List - II
| List - I | List - II | ||
|---|---|---|---|
| (a) | The portion of authorised capital of a company which can be called during winding up | (i) | Other current liabilities |
| (b) | Excess of share forfeited amount over the loss on reissue | (ii) | Reserve Capital |
| (c) | Calls-in-advance is shown in Balance sheet under the head __ | (iii) | Capital Reserve |
| (d) | Equity shares cannot be issued to public at __ | (iv) | Discount |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (a) - (ii), (b) - (iii), (c) - (i), (d) - (iv)
Two terms here sound alike. Reserve capital is uncalled share capital kept for winding up, while a capital reserve is a reserve made out of capital profits.
| List-I | List-II | Reason |
|---|---|---|
| (a) The portion of authorised capital of a company which can be called during winding up | (ii) Reserve Capital | The company decides that a part of its uncalled capital will be called only if it is wound up; this part is reserve capital. |
| (b) Excess of share forfeited amount over the loss on reissue | (iii) Capital Reserve | What is left in the forfeiture account after the loss on reissue is a capital profit, and it is moved to Capital Reserve. |
| (c) Calls-in-advance is shown in Balance sheet under the head __ | (i) Other current liabilities | Money received before a call is made is a liability of the company until the call falls due. It is not added to paid-up capital. |
| (d) Equity shares cannot be issued to public at __ | (iv) Discount | A company cannot ordinarily issue shares below their face value, so equity shares are not offered to the public at a discount. |
NCERT (2026-27 edition): Reissue of Forfeited Shares – “… The balance, if any, left in the Share-Forfeited Account relating to reissued Shares, should be treated as capital profit and transferred to Capital Reserve Account.” 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.” Issue of Shares at a Discount – “… As a general rule, a company cannot ordinarily issue shares at a discount. It can do so only in cases such as ‘reissue of forfeited shares’ (to be discussed later) and issue of sweat equity shares.” |