Question

Classify the following items under Major Heads and Sub-Heads (if any) in the Balance Sheet of a company as per Schedule III, Part I of the Companies Act, 2013:
(i) Accrued Income
(ii) Capital Advances
(iii) Capital work-in-progress

Hint:

Refer to Schedule III of the Companies Act, 2013, for proper classification of items in the balance sheet. Differentiate between current and non-current assets based on their nature and time horizon.

Answer 1

Step 1: Understanding classifications in Schedule III Accrued income is income that has been earned but not received; it is classified under current assets. Capital advances are advances paid for acquiring fixed assets and are classified under non-current assets. Capital work-in-progress refers to the cost of assets under construction and is classified under fixed assets. Thus, the correct classifications are: Accrued Income: Current Assets – Other Current Assets. Capital Advances: Non-Current Assets – Other Non-Current Assets. Capital work-in-progress: Non-Current Assets – Fixed Assets.