Question

Money received in advance from shareholders before it is actually called-up by the director is ______.

Options

• debited to Calls-in-Advance Account.

• credited to Calls-in-Advance Account.

• debited to Share Capital Account.

• credited to Share Capital Account.

Answer 1

Money received in advance from shareholders before it is actually called-up by the director is credited to Calls-in-Advance Account.

Explanation:

Money received before it becomes due is called Calls-in-Advance. It is a liability of the company and is therefore credited to Calls-in-Advance A/c.