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Reserves and Surplus

The amount re...

Question

The amount received as calls-in-advance is a _____of the company.

A

Right

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B

Asset

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C

Debt

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D

Revenue

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Solution

The correct option is C Debt
Sometimes some shareholders pay a part or the whole of the amount of the calls not yet made. The amount so received from the shareholders is known as “Calls in Advance”. The amount received in advance is a liability of the company and should be credited to 'Call-in-Advance Account.”
This is a Debt of the company.

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