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:

Hint:

Memorize the major heads and common sub-heads under Schedule III: - \textbf{Equity \& Liabilities:} Shareholders' Funds (Share Capital, Reserves \& Surplus), Non-Current Liabilities (Long-term Borrowings, Deferred Tax Liab., Other LT Liab., LT Provisions), Current Liabilities (Short-term Borrowings, Trade Payables, Other Current Liab., ST Provisions). - \textbf{Assets:} Non-Current Assets (Property Plant \& Equipment, Intangible Assets, Capital WIP, Non-current Investments, LT Loans \& Advances, Other Non-current Assets), Current Assets (Current Investments, Inventories, Trade Receivables, Cash \& Cash Equivalents, ST Loans \& Advances, Other Current Assets).

Answer 1

\begin{tabular}{|l|l|l|} \hline Item & Major Head & Sub-head
\hline (i) Work in progress & Current Assets & Inventories
\hline (ii) Securities premium & Shareholders' Funds & Reserves and Surplus
\hline (iii) Creditors (assuming Trade Creditors) & Current Liabilities & Trade Payables
\hline \end{tabular}
Explanation:
(i) Work in progress (WIP): Represents goods that are in the process of production. As per Schedule III, WIP is classified under the major head 'Current Assets' and the sub-head 'Inventories'.
(ii) Securities premium: Represents the excess amount received over the face value of shares or debentures. It is a type of reserve. As per Schedule III, it falls under the major head 'Shareholders' Funds' and the sub-head 'Reserves and Surplus'.
(iii) Creditors: Generally refers to Sundry Creditors or Trade Creditors, representing amounts owed to suppliers for goods or services purchased on credit. These are short-term obligations. As per Schedule III, they are classified under the major head 'Current Liabilities' and the sub-head 'Trade Payables'.