[amp_mcq option1=”liabilities side of B/s” option2=”asset side of B/s” option3=”debit side of P.L. a/c” option4=”credit side of P.L. a/c” correct=”option1″]
The correct answer is: A. liabilities side of B/s.
Calls paid in advance is a liability because it is an amount that the company owes to its shareholders. It is shown separately on the liabilities side of the balance sheet because it is not a current liability, which is an obligation that is due within one year.
The other options are incorrect because:
- B. asset side of B/s: Calls paid in advance is not an asset because it is not something that the company owns.
- C. debit side of P.L. a/c: The debit side of the income statement is for expenses, not liabilities.
- D. credit side of P.L. a/c: The credit side of the income statement is for revenues, not liabilities.
I hope this helps!