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JAMB Principles of Accounts 2014 Question 44

Question 44

Company Accounts

Payment for shares in excess of amount offered gives rise to

  1. A.subscription in advance.
  2. B.revenue reserves.
  3. C.capital reserves.
  4. D.calls-in-advance.
Show the answer and explanation

Answer: D (calls-in-advance.)

Explanation

Money paid by shareholders before the company asks for it is called calls in advance.