Q.Write a brief note on calls in advance.

Calls in advance is the excess money received from shareholders over the amount called up; it is a company liability that carries interest and is adjusted against future calls. Meaning Sometimes a shareholder pays the whole or part of the amount not yet called up on their shares. Such an amount received in excess of the called-up amount is known as calls in advance. In simple terms, it is money paid by a shareholder before the company makes the relevant call. Key features 1. Nature — it is a liability of the company (money it owes back / must adjust), not income, and is shown separately on the liabilities side of the Balance Sheet under current liabilities. 2. Authority — a company can accept calls in advance only if authorised by its Articles of Association. 3. Interest — the company pays interest on calls in advance at the rate specified in the Articles (as per Table F, up to 12% p.a.). This interest is payable even if the company earns no profit. 4. No voting rights — the shareholder gets no voting rights on the amount paid in advance until it is actually called up. 5. Adjustment — when the call is later made, the calls-in-advance a …