Question

explain the accounting treatment of call in arrears and call in advance ?​

Answer 1

Answer:

calls in arrears is asset for a company. so,it treated in Dr. side

while calls in advance is liability for company. so, it is treated in Cr. side

Explanation:

if you understand than make this answer as brailliant...plzz

Answer 2

Answer:

Call In Arrears :

Call in arrears is that when shareholders do not pay the call amount in due date. When any shareholder failed to pay the amount due on allotment or on any of the calls, such amount is known as Call in Arrears . This is also called Unpaid calls. It is an asset to the company.

The entries are :

• Call in arrears ac Dr

To share first call account ac

To share second and final call account ac.

( Call in arrears brought into account )

When Shareholders makes the payment with interest ;

• Bank ac Dr

To call in arrears ac

To interest ac

( Call in arrears received with interest )

Note : if interest is not specified , then there is no need to take interest on call in arrears ac. And don't need to record this entry.

Call In Advance :

When the 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. It is a liability to company and it is credited to calls in advance ac.

The Entries are :

• Bank ac Dr

To calls in advance ac

( Amount received on call in Advance )

• Calls in advance ac Dr

To Particular call ac

( Calls in Advance adjusted with the call Money due )

• Interst on call in Advance ac Dr

To Bank ac

( Interset paid on calls in advance )

Calls in Advance is not added to the amount of Paid up capital