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      Question

      Which among the following best describes “Calls in

      arrears” for a company issuing capital?
      A Asset Correct Answer Incorrect Answer
      B Liability Correct Answer Incorrect Answer
      C Capital Correct Answer Incorrect Answer
      D Revenue Correct Answer Incorrect Answer
      E Expense Correct Answer Incorrect Answer

      Solution

      When some allottees fail to pay the allotment money or call money or any call getting due, that will be referred to as “Calls in arrears”. It is an asset for the company. However it is shown in the balance sheet on the liability side as a deduction from capital. The total amount of calls in arrears is deducted from called up capital in the balance sheet to arrive at the paid-up capital. 

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