Question

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

Options

• debited to the calls in advance account

• credited to the calls in advance account

• debited to the calls account

• None of the above.

Answer 1

Money received in advance from shareholders before it is actually called-up by the directors is credited to the calls in advance account.

Explanation:

Money received in advance from shareholders before it is actually called up by the directors is recorded as calls in advance and shown as another current liability in the company’s balance sheet.