Q.Write a brief note on calls in advance.

Calls in advance = money received against future, un-made calls; it is a liability, carries interest, but no dividend/voting rights on the advance.

Calls in advance (TN HSC Class-12 Accountancy — Company Accounts):

Meaning: When a shareholder pays the amount of calls not yet demanded by the company, the excess amount is called calls in advance. For example, if only application and allotment have been called but a shareholder also pays the first and final call, that extra money is calls in advance.

Key points:

1. The company can accept calls in advance only if authorised by its Articles of Association.
2. It is a liability of the company and is shown under current liabilities in the Balance Sheet — it is NOT added to the called-up capital.
3. Interest is payable on calls in advance (as per Table F of the Companies Act, up to 12% p.a.), even if there is no profit. …