Explanation:

Calls in Advance

The company treats calls-in-advance as a debt of until it makes the calls. The amount already paid is adjusted. Calls-in-advance may also arise when the number of shares allotted to a person is much smaller than the number applied by him for and the terms of issue allow the company to retain the amount received in excess of application and allotment money.

The company can retain only such amount as is required to make the allotted shares fully paid. After transferring the amount to the relevant call accounts, the company closes the calls-in-advance account. It shows this amount under a separate heading, namely ‘calls-in-advance’ on the liabilities side.

As per section 18 of the Table F,  upon all or any of the moneys so advanced, may pay interest at such rate not exceeding, unless the company in general meeting shall otherwise direct, 12% per annum, as may be agreed upon between the Board and the member paying the sum in advance.