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JAMB Principles of Accounts 1999 Question 42

Question 42

Company Accounts

Calls in advance are treated in the balance sheet as

  1. A.current asset
  2. B.current liability
  3. C.fixed asset
  4. D.fixed liability.
Show the answer and explanation

Answer: B (current liability)

Explanation

Money received before a call is made is owed back to shareholders until the call, so it is shown as a liability.