Commerce Exam > Commerce Questions > First call amount received in advance from th...
Start Learning for Free
First call amount received in advance from the shareholders before it is actually called up by the directors is
- a)debited to calls-in-advance account.
- b)credited to share allotment account.
- c)debited to first call account.
- d)credited to calls-in-advance account.
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
First call amount received in advance from the shareholders before it ...
Answer:
Calls-in-Advance from Shareholders
When a company issues shares, it may require shareholders to pay for the shares in installments. The first installment is called the "first call." However, shareholders may choose to pay more than the first call amount in advance. This amount is known as calls-in-advance.
Treatment of Calls-in-Advance
The treatment of calls-in-advance is as follows:
Credited to Calls-in-Advance Account: When shareholders pay calls-in-advance, the amount is credited to the calls-in-advance account.
First Call Amount Received: When the company's directors make the first call, they will debit the first call account and credit the calls-in-advance account for the amount received in advance.
Final Payment: When the directors make the final call, the calls-in-advance account is debited and the share capital account is credited for the total amount received from shareholders.
Conclusion
Therefore, the correct answer is option D: "credited to calls-in-advance account." This is because calls-in-advance received from shareholders are credited to the calls-in-advance account until the directors call for the first installment, at which point the amount received in advance is credited to the first call account.
Calls-in-Advance from Shareholders
When a company issues shares, it may require shareholders to pay for the shares in installments. The first installment is called the "first call." However, shareholders may choose to pay more than the first call amount in advance. This amount is known as calls-in-advance.
Treatment of Calls-in-Advance
The treatment of calls-in-advance is as follows:
Credited to Calls-in-Advance Account: When shareholders pay calls-in-advance, the amount is credited to the calls-in-advance account.
First Call Amount Received: When the company's directors make the first call, they will debit the first call account and credit the calls-in-advance account for the amount received in advance.
Final Payment: When the directors make the final call, the calls-in-advance account is debited and the share capital account is credited for the total amount received from shareholders.
Conclusion
Therefore, the correct answer is option D: "credited to calls-in-advance account." This is because calls-in-advance received from shareholders are credited to the calls-in-advance account until the directors call for the first installment, at which point the amount received in advance is credited to the first call account.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer?
Question Description
First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer?.
First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer?.
Solutions for First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer?, a detailed solution for First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice First call amount received in advance from the shareholders before it is actually called up by the directors isa)debited to calls-in-advance account.b)credited to share allotment account.c)debited to first call account.d)credited to calls-in-advance account.Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup