I Year B.B.A LL.

B – Semester-II (2022)

1st -Internal Assessment

CORPORATE ACCOUNTING - I

Accounting Terminology & India’s Company Account, Issue of shares,

forfeiture, Reissue

NAME: APURVA RANJAN

DIVISION: A

PRN: 21010126079

COURSE: BBA LL.B. (H)

BATCH: 2021-2026
 SECTION A

A. DEFINE A COMPANY, STATE IT’S ESSENTIAL CHARACTERISTICS AND

TYPES.

 DEFINITIONS:

According to Prof. L.H. Haney, “Company is an artificial person created by law having
separated entity with a perpetual succession and common seal”

According to Justice Lindley, “a company means association of persons who contribute

in shape of money or money’s worth to a common stock and employs it for some specific
purpose.”

 CHARACTERISTICS OF A COMPANY:
The company has several distinct characteristics; the significant ones are discussed here:

1. Separate Legal Entity

A company is a separate legal entity from its members who constitute it. It can hold,
purchase and sell properties and enter into contracts in its own name. It is an artificial
legal person who can sue and be sued. Companies are owned by shareholders and
they elect the Board of Directors, who runs the company. The board in turn selects the
management. Thus the shareholders exercise only indirect control over the affairs of
the company. The separation of ownership from the management some-times results
in a conflict of interest between owners and management. The best the shareholders
can do is to change some of the directors through voting in the annual general meeting
subsequent to any such conflict.

2. Limited Liability
The liability of the shareholders of a company is limited to the nominal value of the
shares held by them. In the event of liquidation, the maximum loss of a shareholder is
equal to the nominal value of the shares held by him. The creditors have no claim on
the personal assets of the shareholders in the event of liquidation.
3. Transferability of Shares
The shares of a joint stock company are freely transferable. It does not require any
permission from the company or consent of other shareholders. The shares of listed
companies can be sold or purchased on the stock exchange and ownership transferred
without any difficulty. However, in case of a private limited company, the transfer of
shares is subject to the restrictions given in the company’s articles.

4. Perpetual Succession: An incorporated business never dies, unless it is wound up in

accordance with the law. A company, as a distinct legal entity, is unaffected by the
death or departure of any member and continues to exist as the same entity regardless
of the composition of the membership. Perpetual succession means that a company's
membership may change from time to time without affecting its continuity.

5. An Artificial Person created by Law

A company is called an artificial person because it does not take birth like a natural
person but it comes into existence through the law. The company possesses only those
properties which are conferred upon it by its Memorandum of Association (Charter).

6. Continuous Existence
The companies generally have a continuous existence irrespective of changes in
ownership. In the cases of sole proprietorship and partnership, change in ownership
means the dissolution of the original business and formation of a new business.

7. Common Seal
Being an artificial person, a company can act through natural persons only. The acts
of a company are authorized by the “common seal”. The “common seal” is the official
signature of the company. A document not bearing the common seal is not binding on
the company.
 TYPES OF COMPANIES:-

1. ON THE BASIS OF MEMBERS

a. One-person Company: OPC or one-person company is a new category of company

introduced to encourage start-ups and young entrepreneurs wherein a single
person can incorporate the entity. It also promotes the concept of corporatization of
the business. It should be noted that it is not the same as a sole proprietorship firm,
in a way that OPC has separate legal existence with limited liability.

b. Private Company: A private company is one in which two or more persons get the
company registered under the Companies Act. The securities of such a company are
not listed on a recognized stock exchange, and they cannot invite the public to
subscribe for the shares/debentures. The members of a private company are restricted
from transferring the shares. The maximum number of members in a private
company is 200.
 c. Public Company: A company which is formed by a minimum number of seven
members with a lawful object is termed as a public company. Its securities are listed
on a recognized stock exchange, and its shares are freely transferable. Further, there
is no limit on the maximum number of members in such a company. The subsidiary
of the public company is also considered as a public company.

2. ON THE BASIS OF LIABILITY

a. Company limited by shares: Company limited by shares is one in

which memorandum of association of the company specifies that the liabilities of the
shareholders are limited to the amount unpaid on shares which they own. Hence,
the shareholders are liable only to the extent of the amount that is not paid on their
holdings.

b. Company limited by guarantee: A company in which the liability of members is

limited to a definite sum stated in the memorandum of association of the company.
Meaning that the liability of the members is confined by the to a stipulated sum, as
they have guaranteed to contribute to the company’s assets, in the event of winding
up of the company.

c. Unlimited Company: An unlimited company is a company whose liability does not

have any limit. In this type of company, the liability of the member ends when
he/she ceases to be a member of that company.

3. SPECIAL COMPANIES

a. Government Company: The company whose at least 51% paid up share capital is
owned by Central Government/State Government, or partly by central and partly by
the state government. Further, it also covers a company whose holding company is a
government company.

b. Foreign Company: Any company registered outside the country that has a
business place in India or by way of an agent traditionally or electronically and
undertakes business operations in the country in any manner.

c. Section 8 Company: A company formed for a charitable object, i.e. to encourage

commerce, science, sports, art, research, education, social welfare, environment
protection religion, etc. comes under the category of Section 8 Company. These
companies are given special license by the Central Government. Further, they use
 the money earned as profit for the promotion of the object and thus, dividend to
members is not paid.

d. Public Financial Institution: The companies, which are engaged in financial and
investment business and whose 51% or more paid up share capital is held by Central
Government and are established under any act are termed as public financial
institutions. It includes LIC, ICICI, IDFC, IDBI, UTI etc.

4. ON THE BASIS OF THE CONTROL

a. Holding Company: A parent company that owns and controls the management and
composition of the Board of Directors of another company (i.e. subsidiary company)
is termed as a holding company.

b. Subsidiary Company: A company whose more than 51% of its total share
capital is owned by another company, i.e. a holding company either itself or together
with its subsidiaries, as well as the holding company also governs the composition of
Board of Directors is called the subsidiary company.

c. Associate Company: A company in which another company possesses

a considerable influence over the company, then the latter is called as an associate
company. The term considerable influence implies controls a minimum 20% of total
share capital, or business decisions, as per an agreement.

B. SHORT NOTES:-

1. Call in Advance
Calls-in-Advance refers to the amount received by the company in advance of calling for
payment by the shareholders. Calls-in-Advance are typically issued in response to an
oversubscription of shares. Excess application money is deducted from the amount due on
allotment or calls in this section. If the articles so provide, the excess application money
after allotment adjustment is transferred to an account designated as a Calls-in-Advance
Account. Occasionally, a small number of shareholders may prefer to pay the full amount
at the time of allotment. In this case, the advance funds for the future call(s) are also
transferred to the Calls-in-Advance Account.
2. Call in Arrear
When a company calls money as allotment or call money and a shareholder does not pay
the money, the amount not received is referred to as calls-in-arrears.
 Rate of Interest: The Company is authorized to charge interest on the Calls-in-
Arrears at a rate specified in the Articles of Association from the last date fixed for
payment to the date of payment. But if the Articles of Association are silent, Table A
shall apply, which empowers the Board of Directors to charge interest at a rate not
exceeding 5% per annum.
 Disclosure in Balance Sheet: The amount of the Calls-in-Arrears is shown by way
of deduction from the called-up capital in the Balance Sheet. Accounting Treatment
of Calls-in-Arrears
 There are two methods of dealing with the Calls-in-Arrears:
a. Without Opening the Calls-in-Arrears Account: Under this method, there is
no need to pass any Journal entry for the Calls-in-Arrears because the difference
between the entry of the call money due and call money received will clearly
indicate the amount of the Calls-in-Arrears.
b. By Opening the Calls-in-Arrears Account: The alternative method to treat the
Calls-in-Arrears is by opening a ‘Calls-in Arrears Account’. If the amount of
calls has not been paid by some shareholders, the Calls-in-Arrears Account is
debited. In this case, allotment and other call accounts will not show any balance
but the Calls-in-Arrears Account will show a debit balance equal to the total
unpaid on various installments. If later on any amount is received, it is credited
to the Calls-in-Arrears Account.

3. Procedure for Public Issue of Shares Issue

Under public issue, the new shares/debentures may be offered either directly to the public
through a prospectus (offer document) or indirectly through an offer for sale involving
financial intermediaries or issue houses. The main steps involved in public issue are as
follows:
a. Draft Prospectus: A draft prospectus has to be prepared giving all required
information. Any company or a listed company making a public issue or a right
issue of value more than Rs. 50 lakh has to file a draft offer document with SEBI
for its observation. The company can proceed further after getting observations
 from the SEBI. The company can open its issue within 3 months from the date of
SEBI’s observation letter.

b. Fulfillment of Entry Norms: The SEBI has laid down certain entry norms
(parameters) for accessing the primary market. A company can enter into the
primary market only if a company fulfils these entry norms.

c. Appointment of Underwriters: Sometimes underwriters are appointed to ensure

full subscription.

d. Appointment of Bankers: Generally, the company shall nominate its own banker
to act as collecting agent. The bankers along with their branch network process the
funds procured during the public issue.

e. Initiating Allotment Procedure: When the issue is subscribed to the minimum

level, the registrars initiate the allotment procedure.

f. Appointment of Brokers to the Issue: Recognized members of the stock

exchange are appointed as brokers to the issue.

g. Filing of Documents: Documents such as draft prospectus, along with the copies
of the agreements entered into with the lead manager, underwriters, bankers,
Registrars, and brokers to the issue have to be filed with the Registrar of
Companies.

h. Printing of Prospectus and Application Forms: After filing the above

documents, the prospectus and application forms are printed and dispatched to all
merchant bankers, underwriters and brokers to the issue.

i. Listing the Issue: It is very essential to send a letter to the stock exchange
concerned where the issue is proposed to be listed.
 j. Publication in Newspapers: The next step is to publish an abridged version of
the prospectus and the commencing and closing dates of issues in major English
dailies and vernacular newspapers.

k. Allotment of Shares: After close of the issue, all application forms are
scrutinized tabulated and then the shares are allotted against those applications
received.

4. Share Capital
Meaning:
Share Capital means the Capital raised by a Company by the issue of shares. Many
individuals and institutions contribute varying sums to the Company’s capital yet there is
no separate Capital Account for each of these individuals or institutions. There is one
Consolidated Capital Account called the Share Capital Account.
Kinds of Share Capitals:-
1. Authorized Capital
Authorized share capital refers to the entire capital that a corporation takes from its
investors by issuing shares that are listed in the company's official documentation.
This capital is also known as Registered Capital or Nominal Capital because it is
used to register a corporation. According to Section 2(8) of the Companies Act, 2013,
the ceiling on Authorized Capital is set by the Capital Clause in the Memorandum of
Association. The firm has the authority to take the steps necessary to increase the
authorized capital limit in order to issue more shares, but it is never allowed to issue
shares that exceed the authorized capital limit.

Authorized Share = Issued Share + Unissued Share.

2. Issued Capital
Issued Share Capital refers to the portion of Authorized Share Capital that is made
available to the public for subscription. The act of issuing shares is referred to as
issuance, allocation, or allotment. Issued Share Capital is a subset of Authorized
Share Capital, to put it another way. After the allotment of shares, a subscriber
becomes a shareholder.
3. Unissued Capital
As previously indicated, companies issue shares on a regular basis. As a result, they
will have different approved and issued share capital. The company's unissued share
capital will be the difference between the two sums. The quantity of shares that a
company has available to raise capital is referred to as unissued capital.

4. Subscribed Capital
Subscribed Capital is that part of Issued Capital which has been subscribed for by the
public. If, say, 13,000 shares of 100 each are offered to the public and the public
applies for 12,000 shares, the Subscribed Capital will be 12, 00,000.

Subscribed capital is shown in the Balance Sheet under two heads:

a. Subscribed and fully paid up

When entire nominal (face) value of a share is called by the company and also
paid up by the shareholder, it is said to be 'Subscribed and fully paid-up' Capital.

b. Subscribed but not fully paid up

Shares are said to be 'Subscribed but not fully paid-up' under the following two
situations:
(1) When the company has called-up the full nominal value of the share but the
shareholder has not paid some part of the nominal value of the share.
(ii) When the company has not called-up the full nominal value of the share.

5. Called - up Capital
Called-up Capital refers to the portion of the Subscribed Capital that is used to pay
the shareholder. The company does not receive the entire amount of capital at once.
When installments are required, it uses a portion of the subscribed capital. The
remainder of the Subscribed Capital is referred to as Uncalled Capital.

For example, if the directors call at the rate of rupees 60 per share on 12,000 shares
of rupees 100 each, rupees 7, 20,000 will be called up Capital. The remaining amount
of rupees 40 per share will be Uncalled Capital.
6. Paid – up Capital
The term "Paid-up" refers to that portion of called up capital which has been actually
received from the shareholders. Usually the called-up Capital and the paid-up Capital
are the same except that some shareholders may not have paid the amount of calls.
Any unpaid amount is called 'Calls in arrear'. If a shareholder has paid 5 against the
called-up amount of 8, then 5 is paid-up amount. Paid up Capital will be called up
Capital less the amount of calls in arrears.

7. Reserve Capital
As per Section 65 of the Companies Act, 2013, only an unlimited company having a
share capital while converting into a limited company, may have reserve capital. In
such a case, the company by a resolution may
(i) Increase the nominal amount of its share capital by increasing the nominal amount
of each of its shares, and determine that no part of the increased capital shall be
called up except in the event of winding up of the company; or
(ii) Provide that a specified portion of its uncalled share capital shall not be called
except in the event of winding up of the company.
In such a case the increased capital in Case (i) or specified portion of uncalled capital
in case (ii) becomes Reserve Capital. It is available only for the creditors on the
winding up of the company.
8. Capital Reserve
Capital reserves are those reserves which are created out of Capital profits. Capital
profits are those profits which are not earned in the normal course of the business.
These reserves cannot be utilized for the distribution of dividends. Following are the
items that give rise to Capital profits and hence Capital Reserves:
(I) Profit on sale of fixed assets.
(II) Profit on revaluation of fixed assets.
(III) Premium on issue of shares and debentures.
(IV) Profit on redemption of debentures.
(V) Profit earned by a company prior to its incorporation.
(VI) Profit on forfeiture and re-issue of shares.
Capital Reserves are shown on the liabilities side of the Balance Sheet under the head
"Reserves and Surplus."
5. Stages in Formation of a Company

From the time the idea of forming a company is first conceived to the time the company
is actually formed and incorporated and commences business, there are four distinct
stages, namely:
(a) Promotion;
(b) Incorporation;
(c) Capital Subscription; and
(d) Commencement of Business.
A private company can commence business immediately after incorporation. That means,
only the first two stages are relevant for a private company.

a. Promotion Stage: According to Grettenberger, promotion means discovery of

business opportunities and the subsequent organization of funds, property, and
management ability to run a business concern for the purpose of making profit there
from. The person who undertakes all these activities is a promoter. he originates a
scheme for the formation of the company, gets the Memorandum and Articles
prepared, and registered and funds the first directors, settles the terms of preliminary
contracts and prospectus (if any) and makes arrangement for raising the capital.
b. Incorporation Stage: For getting the company incorporated, the following
documents have to be prepared and filed with the Registrar of Companies:
(i) Memorandum of Association,
(ii) Articles of Association,
(iii) Statement of Nominal Capital,
(iv) A list of directors with their names in full, addresses and occupation and age,
(v) Consent of the directors to a act as directors, and
(vi) Notice of the address of the registered office.
Along with the above document, a statutory declaration has also to be filed. The
declaration should state that all the requirements of the law for registration have been
 duly complied with. The declaration may be made by any of the following persons:
(a) An advocate of the supreme Court or High Court;
(b) An attorney or pleader, entitled to appear before a High Court;
(c) A Chartered Accountant practicing in India and who is engaged in the formation
of the company; and
(d) By and person, who is named in the Articles as Director, Manager or Secretary
of the Company.
On filing the above documents and payment of necessary fees, the Registrar, if
satisfied that all the legal formalities have been fulfilled, will register the company
and issue a certificate of incorporation under his seal. The certificate of incorporation
brings the company into existence as a legal person and may be termed as its birth
certificate. It is a conclusive proof of the fact that the company is duly registered and
all the requirements of law have been complied with.
After getting the Certificate of Incorporation, a private company can start business
operations.
c. Capital Subscription Stage: A private company or a public company not having
share capital can commence business immediately after getting the certificate of
incorporation. But a public company having a share capital has of pass through the
capital subscription stage before it can commence the business.
In order to raise capital from the public, a prospectus is t be issued a statement in lieu
of prospectus is to be filed with the Registrar of Companies. The draft prospectus or
statement in lieu of prospectus is approved by the Board of Directors in its meeting
beggar it could be filed with the Registrar and issued to the public. The Board may
decide to get the issue if share capital underwritten to ensure that minimum
subscriptions rose.
That application forms for the allotment of shares along with the application money
are deposited with the bankers of the company mentioned in the prospectus. After this
the Board of Directors will make allotment of shares in consultation with the stock
exchange and a return as to allotment of shares is sent to the Registrar of Companies
within one month of the allotment.
d. Commencement of Business Stage: A public company having share capital must
obtain a ‘certificate to commence businesses from the Register of Companies before it
can commence business. In order to obtain this certificate, the company must with the
provisions of the Companies Act. When these requirements have been complied with,
 the Registrar of Companies will issue a trading certificate know as certificate to
commence business to the company which is conclusive evidence that the company is
entitled to commence business.

C. Difference between :-

1. Public & Private Limited

2. Memorandum of Association and Article of Association.

1. Public & Private Limited

The differences between Public & Private Limited are:-

SECTION 2(71) of Companies Act, 2013 2(68) of Companies Act,

2013

DEFINATION A public company is a company A company having a

minimum paid-up share
1. Which is not a private
capital as may be
company
prescribed, and which
2. Has minimum paid-up
by its articles, -
share capital as may be
prescribed  restricts the
rights to transfer
Provided that a company which is
its shares;
a subsidiary of a company, not
 except in case of
being a private company, shall be
One Person
deemed to be a public company for
Company, limits
the purposes of this Act even
the number of its
where such subsidiary company
members to two
continues to be a private company
hundred;
in its articles ;
 prohibits any
 invitation to the
public to
subscribe for any
securities of the
company;

APPLICABLE LAW Companies Act, 2013 Companies, Act 2013

LIABILITY Limited or Unlimited Limited or Unlimited

NUMBER OF Minimum 7 and Maximum Minimum of 2 and

MEMEBERS unlimited members Maximum of 200
DIRECTORS Minimum 7 ad Maximum Minimum of 2 and
unlimited members Maximum of 200
STATUTORY Mandatory Mandatory
AUDIT
NOMINEE No concept of Nominee in public No Concept of Nominee
company in private company
TAXABILITY Flat rate of 30% Flat rate 30%

SUFFIX OF THE Should end with public limited or Should end with Pvt.
COMPANY limited Ltd
TRANSFERABILITY Easily transferable Transfer of shares is
restricted
BUSINESS Any business Any business Except
ACTIVITIES those where private
investment is not
allowed
RAISING OF FUNDS Can raise funds from the public by Cannot raise funds from
issuing a prospectus public raising of funds is
allowed through various
ways including issues of
equity, right issues etc
 CONVERSION Can be converted into private Can be converted into
company voluntarily public company
voluntarily
MINIMUM SHARE No requirement for minimum share No requirement for
CAPITAL capital minimum share capital

2. Memorandum of Association and Article of Association

The differences between Memorandum of Association and Article of Association are:-

Memorandum of Association Article of Association

The memorandum of association is The article of association is very well
defined in the companies act section 2 represented in the companies act section 2
subsection 52 subsection 5
The memorandum of association must The article of association is drafted and
contain six clauses; object, name, domain, designed as per the choice of the company
etc. and also not necessary to submit to get a
company registered.
The memorandum of association defines A public company that is limited by
the relationship between the company and shares if it does not have its article of
the outsider’s clients, which the company association can instead adopt Table A
needs to serve. Therefore, it always guides present in the companies act
the relationship between the company and
the outsiders the company is dealing with.
The memorandum of association is an The article of association regulates and
obligatory part of the document in the directs the internal procedures of the
company’s act. Therefore, it is an company and its members and the
obligation on the part of the directors to limitations of each member. It mainly
draft the memorandum of association for a emphasizes how well the company is
company. managed internally and governed through
its internal policies, which are made at it
incorporation.
 The memorandum of association does not The company’s shareholders can later
aloe the company to act beyond its scope, easily ratify the article of association.
which is laid in the MOA submitted at its
registration

SECTION B

Give journal entries for following transactions with their narrations:-

1. On Application
2. On Allotment
3. On First Call
4. On Second & Final Call
5. Calls in arrears
6. Calls in advance

1. On Application

Explanation: A collective account for multiple applicants is known as a Share

Application A/c. It's a personal account that represents you. This entry is made instantly
in Cash Book in practice. The receiving of applications is only a proposal and cannot be
credited to Share Capital A/c unless the corporation allots shares. The applicants are
handled as corporate creditors.

Date Particulars L.F. Dr. Cr.

Bank A/C ----Dr.
To Share Application A/C
(Application money received on _____ shares at
the rate of rupees _____ per share)
2. On Allotment

1.1 Explanation: Application money is a part of the share capital of the Company, and as
such, when the directors allot the shares, the share application money is transferred to
Share Capital Account.

Date Particulars L.F. Dr. Cr.

Share Application A/C ---Dr.
To Share Capital A/C
(Application money on allotted shares transferred
to Share Capital A/C )

1.2 Explanation: Sometimes, the directors do not allot any shares to some of the
applicants. The application money of such applicants is returned to them. The entry
will be:

Date Particulars L.F. Dr. Cr.

Share Application A/C ---Dr.
To Bank A/C
(Application money returned on un- allotted
shares)

1.3 Explanation: Those applicants who are allotted shares are sent letters of allotment in
which the number of shares allotted and the amount due on allotment is mentioned. As
soon as the allotment letters are issued, the allotment money becomes due and
becomes a part of Share Capital. The entry required is :

Date Particulars L.F. Dr. Cr.

Share Allotment A/C ---Dr.
To Share Capital A/C
 (Amount due on allotment on ___ shares at the
rate of rupees ____ per share.)

1.4 Explanation: On receipt of Allotment Money

Date Particulars L.F. Dr. Cr.

Bank A/C ---Dr.
To Share Allotment A/C
(Amount received on allotment on ___ shares at
the rate of rupees ____ per share.)

3. On First Call

1.1 When Shareholders are informed to pay the First Call

Explanation: Once the shares have been allotted to the applicants, the Board of
Directors of the company makes an announcement of first call. First call is the
installment that they ask from the stakeholders, and subsequently falls due on the
shareholders.
Date Particulars L.F. Dr. Cr.
Share First Call A/C ----Dr.
To Share Capital A/C
(First Call due on ___ shares at the rate of rupees
____ per share.)

1.2 On receipt of First Call Money

Explanation: When in the response of the first call, the stakeholders respond to it by
making a payment of the amount asked, it is known as first call, and the journal entry
for the same is passed.
Date Particulars L.F. Dr. Cr.
 Bank A/C ----Dr.
To Share First Call A/C
(First Call money received on ___ shares at the
rate of rupees ____ per share.)

4. On Second & Final Call

1.1 When Shareholders are informed to pay the Second & Final Call
Explanation: On the discretion of the Board of Directors, another announcement is
made for the payment of a second instalment, which can also be the last instalment
that the company can ask for from the stakeholders. It is thus known as Second and
Final Call.
Date Particulars L.F. Dr. Cr.
Share Second & Final Calls A/C -----Dr.
To Share Capital A/C
(Second & Final Call due on ___ shares at the
rate of rupees ____ per share.)

1.2 On receipt of Second & Final Call Money

Explanation: When in response to the second and final call, the shareholders make
the payment of the instalment to the company, journal entry for second and final call
is passed in the company’s books.
Date Particulars L.F. Dr. Cr.
Bank A/C ----Dr.
To Share Second & Final Call A/C
(Second & Final Calls money received on ___
shares at the rate of rupees ____ per share.)
5. Calls in Arrears
Explanation: "Calls-in-arrears" refers to an amount that has been called in respect of a
share but has not been paid prior to or on the specified date set for payment. The
Company might call up such an amount as Allotment Money or Call Money. The term
"call in arrears" refers to any delinquency caused by failure to pay the call money.

Date Particulars L.F. Dr. Cr.

Calls in Arrear A/C ----Dr.
To Relevant Call A/C
(Being recording of the calls in arrears)

6. Calls in Advance
Explanation: Calls in advance are excess funds received by a corporation that has been
called up. A Company may receive call in advance from its stakeholders if its Articles
allow it. When a business receives a payment like this, it must credit it to the calls-in-
advance account. The corporation considers calls-in-advance to be a debt until the calls
are made. The amount that has already been paid has been modified. When the number of
shares issued to a person is significantly less than the number he requested for, and the
rules of issue allow the firm to keep the money paid in advance of the application and
allotment money, calls-in-advance may occur.
Date Particulars L.F. Dr. Cr.
Bank A/C ----Dr.
To Calls in Advance A/C
(Being recording of the calls in advance)