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 :
(i) Computer software
(ii) Outstanding salary
(iii) Work in progress

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Always refer to Schedule III of Companies Act, 2013 for proper classification. Misclassification leads to incorrect financial analysis.
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Solution and Explanation


Computer software – shown under Intangible Assets in Non-Current Assets.
Outstanding salary – shown under Other Current Liabilities in Current Liabilities.
Work in progress – shown under Inventories in Current Assets as “Work-in-Progress.” Explanation:
- Computer software is intangible because it has no physical existence but provides future economic benefits.
- Outstanding salary is an expense due but not paid as on balance sheet date, thus treated as a liability.
- Work in progress represents partly finished goods and is classified under inventories.
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