Question

Debentures repayable after 12 months or after the period of Operating Cycle from the date of Balance Sheet are shown in the Balance Sheet of a company under the head of:
\

• A. Non-current Liabilities
• B. Current Liabilities
• C. Share Capital
• D. None of these

Hint:

Always check the "12-month" rule first. Anything due after 1 year is generally a Non-current liability.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
As per Schedule III of the Companies Act, 2013, liabilities are classified as Current or Non-current based on the time of their settlement.
Step 2: Detailed Explanation:
- Current Liabilities: Liabilities that are expected to be settled within 12 months from the date of the balance sheet or within the operating cycle.
- Non-current Liabilities: Liabilities that are payable after a period of 12 months or beyond the operating cycle.
Since the question specifies the repayment is after 12 months or the operating cycle, they are long-term in nature.
Step 3: Final Answer:
They are shown under the major head "Non-current Liabilities" (specifically as Long-term Borrowings).