Question

Classify the following items under major heads and sub-heads (if any) in the Balance Sheet of the company as per Schedule III Part I of the Companies Act, 2013: \[ \begin{array}{|l|l|} \hline Item & Classification in Balance Sheet
\hline \text{Long-Term Loans from Bank} & \text{Non-Current Liabilities → Long-Term Borrowings}
\hline \text{Loose Tools} & \text{Non-Current Assets → Fixed Assets → Tangible Assets}
\hline \text{Outstanding Expenses} & \text{Current Liabilities → Other Current Liabilities}
\hline \end{array} \] \vspace{0.5cm}

Hint:

When classifying items in a balance sheet as per Schedule III of the Companies Act, 2013, always check: 1. Whether the item is an asset or liability. 2. Its time horizon (current vs. non-current). 3. Specific sub-heads like borrowings, fixed assets, or other liabilities.

Answer 1

\[ \begin{array}{|l|l|} \hline Liabilities & Amount
\hline \text{Non-Current Liabilities} &
\quad \text{Long-Term Borrowings} & \text{(e.g., Long-Term Loans from Bank)}
\hline \text{Current Liabilities} &
\quad \text{Other Current Liabilities} & \text{(e.g., Outstanding Expenses)}
\hline \end{array} \] \[ \begin{array}{|l|l|} \hline Assets & Amount
\hline \text{Non-Current Assets} &
\quad \text{Fixed Assets} &
\quad \quad \text{Tangible Assets} & \text{(e.g., Loose Tools)}
\hline \end{array} \] \vspace{0.5cm} Explanation: 1. Long-Term Loans from Bank: - These are liabilities due after more than 12 months. - Classified under "Non-Current Liabilities → Long-Term Borrowings." 2. Loose Tools: - Tools used in operations over a long period are classified under "Non-Current Assets → Fixed Assets → Tangible Assets." 3. Outstanding Expenses: - These are unpaid expenses that are due within the current financial year. - Classified under "Current Liabilities → Other Current Liabilities." \vspace{0.5cm}