Question

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

Options

• Credited to the calls in advance account

• Debited to calls in advance account

• Credited to the calls account

• Debited to the calls in arrears account

Answer 1

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

Explanation:

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