Question

Under which major headings and sub-headings (if any) will the following items be shown in the Balance Sheet of a company as per Schedule III, Part I of the Companies Act, 2013?
(a) Calls-in-Advance
(b) Loose tools
(c) Trade marks

Hint:

Refer Schedule III of Companies Act, 2013: Non-current and current classification is based on expected usage or settlement within 12 months.

Answer 1

(a) Calls-in-Advance:
Major Heading: Equity and Liabilities
Sub-heading: Other Current Liabilities
Explanation: Calls-in-advance is a liability as the company has received an amount not yet due. Hence, it is shown under current liabilities.


(b) Loose tools:
Major Heading: Assets
Sub-heading: Current Assets → Inventories
Explanation: Loose tools are consumed in the normal course of business and hence treated as inventory.


(c) Trade Marks:
Major Heading: Assets
Sub-heading: Non-Current Assets → Intangible Assets
Explanation: Trademarks are identifiable non-monetary assets without physical substance used in the business.