Company Accounts

Share Capital

Easy

common

Calls in arrears are shown in the balance sheet as.

Current assets.

A deduction from the paid up capital.

Current liability.

Reserve and surplus.

✅ Correct Option: 2

Calls in arrears represent the amount that shareholders have failed to pay when called upon by the company. This is money that was due but not received.

In the balance sheet under Shareholders' Funds, the presentation follows this structure:

Subscribed Capital

Less: Calls in Arrears

Paid-up Capital

Since calls in arrears is an amount that should have been paid by shareholders but remains unpaid, it reduces the actual capital available with the company. Therefore, it is shown as a deduction from the called-up capital to arrive at the paid-up capital.

Why other options are incorrect:

Current Assets - Calls in arrears cannot be treated as a current asset because it represents non-payment by shareholders and recovery is uncertain. Assets should have reasonable certainty of realization.

Current Liability - The company doesn't owe this amount to anyone. Rather, shareholders owe this money to the company. Hence, it's not a liability.

Reserve and Surplus - Reserves represent accumulated profits or funds set aside. Calls in arrears is a negative item representing uncollected capital, not a reserve.

The correct treatment is Option 2 - it reduces the subscribed capital to show the actual paid-up capital in the balance sheet.

2026: 24 May Shift 1

Abhay, a shareholder, failed to pay the money for second and final call of Rs. 20 on 1,000 shares issued to him at Rs. 120 (face value Rs. 100 per share). His shares were forfeited after the second call. Share capital A/c would be debited by:

2025: 3 June Shift 1

Identify which of the following will be shown in Notes to Accounts under SHARE CAPITAL head :-

2025: 24 May Shift 1

A share having a face value of Rs.12, on which Rs. 10 is called-up and Rs. 8 is paid, is forfeited. State the amount with which the Share Capital account will be debited

2026: 11 May Shift 1

Match the LIST-I with LIST-II

	LIST-I (Classification of Share Capital)		LIST-II (Categories of Share Capital)
A.	The authorised capital which is not offered for public subscription and it may be offered for public subscription at a later date.	I.	Issued Capital
B.	A company may reserve a portion of its uncalled capital to be called only in the event of winding up of the company.	II.	Paid up Capital
C.	It is that part of the authorised capital which is actually issued to the public for subscription including the shares allotted to vendors and the signatories to the company's memorandum.	III.	Reserve Capital
D.	It is that portion of the called up capital which has been actually received from the shareholders.	IV.	Unissued capital

Choose the correct answer from the options given below:

2024

If a delay occurs beyond 8 days in refunding the subscription amount, failing to gather the minimum subscription, from the date of closure of the subscription list, the company shall be liable for interest at the rate of:

2026: 29 May Shift 1

A company issuing sweat equity shares has to fulfill the following prescribed conditions :

(A) These shares are of the same class of shares already issued.

(B) It is authorized by a special resolution passed by a company.

(D) Not less than one year has, at the date of issue, elapsed since the date on which the company had commenced business.

Choose the correct answer from the options given below:

Calls in arrears are shown in the balance sheet as.

Solution

Related questions:

Keyboard Shortcuts

CUET Accountancy Past Year Questions (Topic-Wise)