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:

(a) Bills Payable

(b) Public Deposits

(c) Accrued Income

Hint:

Bills payable are trade payables in current liabilities. Public deposits are long-term borrowings. Accrued income is an other current asset.

Answer 1

Step 1: Know the rule for classification:
As per Schedule III, Part I, every item in the Balance Sheet goes under a major head and a sub-head. Current means due or realised within 12 months. Anything else is non-current. Liabilities go under Equity and Liabilities and assets go under Assets.

Step 2: Bills payable:
Bills payable are bills of exchange the company has accepted for goods bought on credit. They are payable to suppliers, normally within a few months. So they are a current liability, and the sub-head is Trade Payables.
Major head: Current Liabilities. Sub-head: Trade Payables.

Step 3: Public deposits:
Public deposits are money the company borrows from the public for a fixed period, often one to three years. They are borrowings that are not payable within 12 months, so they are non-current.
Major head: Non-Current Liabilities. Sub-head: Long-term Borrowings.

Step 4: Accrued income:
Accrued income is income earned during the year but not yet received, such as interest earned and due. It is a right to receive money, so it is an asset. It will be received soon, so it is current.
Major head: Current Assets. Sub-head: Other Current Assets.

Step 5: Show the classification together:

Item	Major head	Sub-head
(a) Bills Payable	Current Liabilities	Trade Payables
(b) Public Deposits	Non-Current Liabilities	Long-term Borrowings
(c) Accrued Income	Current Assets	Other Current Assets

Final Answer:
(a) Current Liabilities - Trade Payables; (b) Non-Current Liabilities - Long-term Borrowings; (c) Current Assets - Other Current Assets.