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

\[ \begin{array}{|l|l|} \hline \textbf{Liabilities} & \textbf{Amount} \\ \hline \text{Non-Current Liabilities} & \\ \quad \text{Long-Term Borrowings} & \text{(e.g., Bank Long-Term Loans)} \\ \hline \text{Current Liabilities} & \\ \quad \text{Other Current Liabilities} & \text{(e.g., Accrued Expenses)} \\ \hline \end{array} \] \[ \begin{array}{|l|l|} \hline \textbf{Assets} & \textbf{Amount} \\ \hline \text{Non-Current Assets} & \\ \quad \text{Fixed Assets} & \\ \quad \quad \text{Tangible Assets} & \text{(e.g., Loose Tools)} \\ \hline \end{array} \] \vspace{0.5cm} \textbf{Explanation:} 1. \textbf{Bank Long-Term Loans}: * These are obligations due beyond 12 months. * Categorized under "Non-Current Liabilities $\to$ Long-Term Borrowings." 2. \textbf{Loose Tools}: * Tools utilized in operations over an extended duration are classified as "Non-Current Assets $\to$ Fixed Assets $\to$ Tangible Assets." 3. \textbf{Accrued Expenses}: * These represent unpaid expenses due within the current fiscal year. * Categorized under "Current Liabilities $\to$ Other Current Liabilities." \vspace{0.5cm}