When Calls in Advance Account is adjusted _______ is credited and _______ is debited.

When shareholders pay for future calls before they are actually made, the amount is credited to Calls in Advance Account (shown as a liability on the liabilities side of the Balance Sheet).

When the actual call is made and needs to be adjusted, the advance amount must be transferred from Calls in Advance Account to the Respective Call Account.

The adjustment entry is:

Calls in Advance A/c ... Dr

To Respective Call A/c

In this entry:

• Calls in Advance A/c is debited (to reduce the liability as the advance is now being adjusted)
• Respective Call A/c is credited (to show that the call amount has been received)

For example, if ₹10,000 was received in advance for First Call and now First Call is being made, the entry would be:

Calls in Advance A/c ... Dr 10,000

To First Call A/c ... 10,000

This reduces the calls in advance liability and increases the amount received against the actual call.

Answer: Option 1 - Respective call A/c is credited and Calls in Advance A/c is debited.