Chapte:- 2
Issue of Shares for Cash
1. Give the meaning of calls in arrears and calls in advance.
Ans:-The amount called by the company but not paid by the shareholder in due date is called calls in arrears. In other words, calls in arrear means the amount called by the company, but not paid by the shareholder in pre fixed time. The calls in arrears are deducted from the paid up capital and it is debited at the time of arrears.
The amount which is not called by the company but paid by a shareholder before the due time is called calls in advance. In others words, the amount received by a company before calls are made is called calls in advance. It is credited at the time of advance received and debited at the time of advance received is adjusted on due calls.
2. Give the meaning of calls in advance.
Ans:- The amount which is not called by the company but paid by a shareholder before the due time is called calls in advance. In others words, the amount received by a company before calls are made is called calls in advance. It is credited at the time of advance received and debited at the time of advance received is adjusted on due calls.
3. What do you mean by ‘pro-rata allotment’?
Ans:-When the shares are allotted in a proportionate, basis in case of over subscription, it is called pro-rata allotment of shares. Under this, each applicant gets shares in proportionate to the number of shares applied by them. For example, if company allots 50,000 shares. It is pro-rata allotment in the proportion of 5:7.