Calls-in-arrear

Calls-in-arrear refer to that portion of the capital, which has been called up but not yet paid by the shareholders. When a shareholder fail to pay the amount due on allotment and/or calls, the allotment account and/or calls account will show debit balance equal to total unpaid amounts of each instalment. Generally such amount is transferred to a special account called ‘Calls-in-arrear Account’

The main purpose of opening a Calls-in-arrear account is to close allotment or any other Call account with the amounts not yet received.

The entry will be:

Calls-in-arrear Account (Debit)

                To Sharer Allotment Account (Credit)

                To Share Call Account     (Credit)