Question

Assertion (A): Calls amount not received is always transferred to Calls-in-Arrears Account and shown under Shares Subscribed but not Fully Paid-up as deduction in the Note to Accounts on Share Capital.

Reason (R): Amount not received against Calls are Calls-in-Arrears but it is not always transferred to Calls-in-Arrears Account.

In the context of above two statements, which of the below options is correct?

Options

• Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

• Assertion (A) is false but Reason (R) is true.

• Both Assertion (A) and Reason (R) are false.

Answer 1

Assertion (A) is false but Reason (R) is true.

Explanation:

Unpaid call money is called Calls-in-Arrears, but it is not compulsory to transfer it to a separate Calls-in-Arrears Account. It may remain as a debit balance in the respective Call Account.