When any shareholder fails to pay the amount due on allotment or on any of the calls, such amount is known as ________.
A
Calls-in-Arrears
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B
Share Capital
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C
Share Application
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D
Share Allotment
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Solution
The correct option is A Calls-in-Arrears It often happens that shareholders do not pay the call amount when it becomes due. When any shareholder fails to pay the amount due on allotment or on any of the calls, such amount is known as 'Calls-in- Arrears'/'Unpaid Calls'. Calls-in-Arrears represent the debit balance of all the calls account and are shown as a deduction from the paid-up capital on liabilities side of the balance sheet.