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Calls in Arrears Video Lecture | Accountancy Class 12 - Commerce

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FAQs on Calls in Arrears Video Lecture - Accountancy Class 12 - Commerce

1. What are calls in arrears in commerce?
Ans. Calls in arrears in commerce refer to the situation where a shareholder fails to pay the full amount due on a share within the specified time frame after the call is made by the company. It means the shareholder is in default or behind in making the required payment.
2. How are calls in arrears treated in commerce?
Ans. Calls in arrears are typically treated as a liability of the shareholder towards the company. The amount in arrears is recorded separately in the company's books and is recoverable from the shareholder. The company may charge interest on the amount in arrears until it is fully paid.
3. What are the consequences of calls in arrears for shareholders in commerce?
Ans. Shareholders who fail to pay calls in arrears may face certain consequences. The company may take legal action to recover the outstanding amount, which can include seizing the shareholder's assets or taking legal action. Additionally, the shareholder may lose certain rights and privileges associated with their shares until the arrears are fully paid.
4. Can calls in arrears be waived or written off in commerce?
Ans. Yes, calls in arrears can be waived or written off in certain circumstances. The company's board of directors has the authority to decide whether to waive or write off the arrears. This decision is usually based on various factors such as the financial condition of the shareholder and the overall impact on the company.
5. How do calls in arrears affect the financial position of a company in commerce?
Ans. Calls in arrears affect the financial position of a company as it represents an outstanding liability. The company's cash flow may be impacted as it is unable to collect the full amount due from the shareholders. Additionally, the company may need to make provisions for potential bad debts if it considers the arrears to be uncollectible.
41 videos|106 docs|56 tests
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