Question

State whether the statement is True or False:
‘In the balance sheet, the contractor account is shown on the liabilities side.’

Hint:

All unpaid dues to outsiders = shown on the liabilities side.

Answer 1

In accounting, a contractor account often represents an amount payable to a contractor for work done or services provided.
If the amount is unpaid as of the balance sheet date, it becomes a liability for the company or firm.
Hence, such outstanding amounts payable to contractors are shown under current liabilities on the liabilities side of the balance sheet.
This ensures that all obligations are properly recorded and financial statements show a true and fair view.
Therefore, the statement is True.