Question 1:

What are the major heads in the Equity and Liabilities part of the Balance Sheet as per Schedule
III?
Answer:
The major heads in the Equities and Liabilities part of the Balance sheet are:

i. Shareholder’s Funds,

ii. Share Application Money Pending Allotment,

iii. Non- Current Liabilities and

iv. Current Liabilities

Question 2:
Under which major head will the following be shown:

(i) Share Capital; and (ii) Money Received Against Share Warrants?
Answer:
Items Major Head
Share Capital Shareholder’s Funds
Money received against share warrants Shareholder’s Funds

Question 3:
List any five items that are shown under Reserves and Surplus.

Answer:
Items shown under Reserves and Surplus are:

i. Capital Reserve,

ii. Capital Redemption Reserve,

iii. Securities Premium Reserve,

iv. Debenture Redemption Reserve,

v. Revaluation Reserve etc.

Question 4:
Under which sub-head will the following be classified or shown:
(i) Long-term Borrowings; (ii) Deferred Tax Liabilities (Net); and (iii) Long-term Provision?

Answer:
 Items
Long-term Borrowings Non-Current Liabilities
Deferred Tax Liabilities (Net) Non-Current Liabilities
Long-Term Provisions Non-Current Liabilities
Question 5:
Name the items that are shown under Long-term Borrowings.
Answer:
Items shown under Long-term Borrowings are:

a. Debentures,

b. Bonds,

c. Terms Loans (both from Banks and from others),

d. Public Deposits,

e. Other Loans and Advances.

Question 6:
State giving reason whether Trade Receivables are classified as Current Assets or Non-current
Assets in the Balance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the
following cases.
Case Operating Cycle Period (Months) Expected Realisation Period (Months)
1 10 11
2 10 12
3 10 13
4 14 13
5 15 16
Answer:
Case As Current Assets or
Non- Current Assets
1. Current Assets
2. Current Assets
3. Non- Current Assets
4. Current Assets
5. Non- Current Assets
Question 7:
State giving reason whether Trade Payables are classified as Current Liabilities or Non-current
Liabilities in the Calance Sheet of a Company as per Schedule III of the Companies Act, 2013 in
the following cases:
Answer:

Question 8:
Under which head and how are the following items shown in the Balance Sheet of a company
under Schedule III:
(i) Calls-in-Arrears; (ii) Share Application Money Pending Allotment; (iii) Unpaid Dividend;
and (iv) Dividend not paid on Cumulative Preference Shares?
Answer:
Items Head Disclosure
It is shown as a deduction from
Subscribed Capital shown as
Calls-in-Arrears Shareholder’s Funds
‘Subscribed but not fully paid’
under Shareholder’s Funds
Share Application Money Share Application Money
It is shown as a separate line item
Pending Allotment Pending Allotment
It is shown as ‘Other Current
Unpaid Dividend Current Liabilities
Liability’ under Current Liabilities
It is shown as Contingent
Dividend not paid on Cumulative Contingent Liabilities and
Liabilities and Commitments in
Preference Shares Commitments
Notes to Accounts
Question 9:
Under which main head and sub-head of Equity and Liabilities part of the Balance Sheet are the
following items classified or shown:

Items Main head Sub-head

Bonds Non-Current Liabilities Long Term Borrowings
Debentures Non-Current Liabilities Long Term Borrowings
Deposits Non-Current Liabilities Long Term Borrowings
Capital redemption Reserve Shareholder’s Funds Reserves and Surplus
Share Forfeiture Account Shareholder’s Funds Subscribed Capital under Share Capital
Sundry Creditors Current Liabilities Trade Payables
Interest Accrued but not due on Current Liabilities Other Current Liabilities
Debentures
(i) Bonds; (ii) Debentures
(iii) Public Deposits; (iv) Capital Redemption Reserve;
(v) Forfeited Shares Account: (vi) Sundry Creditors; and
(vii) Interest Accrued but Not Due on Debentures?
Answer:

State any two items that are included in the following major heads under which liabilities of a
company are shown: (i) Reserves and Surplus; (ii) Long-term Borrowings; (iii) Short-term
Borrowings; (iv) Other Current Liabilities.
Answer:
Major head Items
Reserves and Surplus Capital Reserve, Revaluation Reserve
Long-term Borrowings Debentures, Term Loans from Bank and Others
Short-term Borrowings Cash credit from bank, Loans repayable on demand
Other Current Liabilities Income received in advance, Unpaid Dividends

Question 11:
Classify the following items under major head and sub-head (if any) in the Balance Sheet of a
company as per Schedule III of the Companies Act, 2013: (i) Capital Work-in-Progress: (ii)
Provision for Warranties; (iii) Income received in Advance; and (iv) Capital Advances

Answer

Item Major Head Sub-Head

Capital Work-in-Progress
Provision for Warranties
Income Received in Advance
Capital Advances
Non-Current Assets
Non-Current Liabilities
Current Liabilities
Non-Current Assets
Fixed Assets- Capital Work-in-
Progress
Long Term Provisions
Other Current Liabilities
Long Term Loans & Advances

Question 12. Under which major heads and sub-heads will the following items be placed in the
Balance Sheet of the company as per Schedule 11, Part I of the Companies Act, 2013?
(i) Debentures with maturity period in current financial year
(ii) Securities Premium Reserve
(ii) Provident Fund
Answer:
S. No. Item Major Head
(i) Debentures with maturity period in Current Liabilities
current financial year
(ii) Securities Premium Reserve Shareholders' Funds
(iii) Provident Fund Non-current Liabilitie

Question 14:
Under which of the major heads will the following items be shown while preparing Balance
Sheet of a company, as per Schedule III of the Companies Act, 2013:
(i) Unamortised Loss on Issue of Debentures (To be written off after 12
months from the date of Balance Sheet);
(ii) 10% Debentures; (iii) Stock-in-Trade; (iv) Cash at Bank;
(v) Bills Receivable; (vi) Goodwill; (vii) Loose Tools;
(viii) Truck; (ix) Provision for Tax; and (x) Sundry Creditors?

Answer:

ITEMS HEAD SUB-HEAD

Unamortised Loss on Issue of Non-Current Assets Other Non-Current Assets
Debentures (To be written off
after 12 months from date of
Balance sheet)
10% Debentures Non-Current Liabilities Long-term Borrowings
Stock-in-Trade Current Assets Inventories
Cash at Bank Current Assets Cash and Cash equivalents
Bills Receivable Current Assets Trade Receivables
Fixed Assets (Intangible
Goodwill Non-Current Assets
Assets)
Loose Tools Current Assets Inventories
Truck Non-Current Assets Fixed Assets (Tangible Assets)
Provision for Tax Current Liabilities Short term Provisions
Sundry Creditors Current Liabilities Trade Payables

Question 16: Under which major heads and sub-heads will the following items be presented in
the Balance Sheet of the company as per Schedule Il, Part I of the Companies Act, 2013?
(i) Bank Overdraft
(ii) Subsidy Reserve
(iii) Capital Redemption Reserve
(iv) Mining Rights
(v) Patents
(vi) Debit balance in the Statement of Profit and Loss
(vii) Debenture Redemption Reserve
(vii) Provision for Taxation

Answer:

S. No. Item Major Head

(i) Bank Overdraft Current Liabilities
(ii) Subsidy Reserve Shareholders' Funds
(iii) Capital Redemption Reserve Shareholders' Funds
(iv) Mining Rights Non-current Assets

(v) Patents Non-current Assets

(vi) Debit Balance in the Statement of Profit and Loss Shareholders' Funds
(vii) Debenture Redemption Reserve Shareholders' Funds
(vii) Provision for Taxation Current Liabilities

Question 17:
Under which heads the following are shown in a company's Balance Sheet:
(i) Public Deposits; (ii) Office Furniture;
(iii) Prepaid Rent; (iv) Outstanding Salaries;
 (vi) Interest Accrued on
(v) Computer Software;
Investment?
Answer:

S.
Items Main Head Sub-Head
No.
1 Public Deposits Non-Current Liabilities Long-term Borrowings
2 Office Furniture Non-Current Assets Fixed Assets (Tangible Assets
3 Prepaid Rent Current Assets Other Current Assets
4 Outstanding Salaries Current Liabilities Other Current Liabilities
5 Computer Software Non-Current Assets Fixed Assets (Intangible Asse
6 Interest Accrued on Investment Current Assets Other Current Assets

Question 19:
Under which major headings and sub-headings the following items will be shown in the Balance
Sheet of a company as per schedule III of Companies Act, 2013?
(i) Provision for Employee Benefits.
(ii) Calls-in-Advance.

Answer

S.No. Item Major Head Sub-head

i) Provision for Employee Benefit Non-current Liabilities Long term Provisions
ii) Calls-in-Advance Current Liabilities Other Current Liabilities

Question 19: Under which sub-headings will the following items be placed in the Balance
Sheet of a company as per Schedule II, Part I of the Companies Act, 2013?
(i) Prepaid Expenses
(ii) Loose Tools
(iii) Loans Repayable on Demand
(iv) Provision for Employees Benefit
(v) Negative Balance in the Statement of Profit and Loss
(vi) Bank Overdraft
(vii) Bills Receivables
(viii) Trade Marks
(Delhi 2022)

Answer:

S. No. Item Sub-hea

 (i) Prepaid Expenses Other C
(i) Loose Tools Invento
(ii) Loans repayable on Demand Short-te
(iv) Provision for Employees Benefit Long-te
(v) Negative balance in Statement of Profit and Loss Reserve
(vi) Bank Overdraft Short-te
(vi) Bills Receivables Trade R
(vii) Trade Marks Property

Question 20:
How are the following items shown while preparing Balance Sheet of a company:
(i) Surplus, i.e., Balance in Statement of Profit and Loss (Dr.);
(ii) Interest accrued and due on Debentures;
(iii) Computer Software under development;
(iv) Interest accrued on Investment?

Answer

ITEMS MAJOR HEAD SUB-HEAD

Surplus, i.e. Balance in Statement
of Profit and Loss (Dr.)
Interest accrued and due on
debentures
Computer Software under
development
Interest accrued on Investments
Shareholder’s Funds
Current Liabilities
Non-current Assets
Current Assets
Reserves and Surplus (as
negative figure)
Other Current Liabilities
Fixed Assets (Intangible Assets
under development)
Other Current Assets

Question 21: Under which heads and sub-heads will be the following items shown in the
Balance Sheet of a Company as per Schedule l, Part I of the Companies Act, 2013?
(i) Securities Premium Reserve
(ii) Interest accrued and due on secured loans
(iii) Cash and Bank balance
(iv) Interest accrued but not due
(v) Building
(vi) Mining Rights
(vii) Sundry Debtors
(vii) Sundry Creditors
(ix) Premium on Redemption of Debentures
(x) Provision for Tax

Answer:
S. No. Major Head Sub-head
(i) Shareholders' Funds Reserves and Surplus
(ii) Current Liabilities Other Current Liabilities
(ii) Current Assets Cash and Cash Equivalents
(iv) Current Liabilities Other Current Liabilities
(v) Non-current Assets Property, Plant and Equipme
(Fixed Assets)-Tangible Ass
(vi) Non-current Assets Property, Plant and E
(Fixed Assets)-Intangible As
(vii) Current Assets Trade Receivables
(vii) Current Liabilities Trade Payables
(ix) Non-current Liabilities Other Long-term Liabilities
(x) Current Liabilities Short-term Provisions

Question 22:

Prepare Balance Sheet of the Company as per Schedule III of the

`
Companies Act, 2013:
10% Debentures of ` 100 each 1,90,000
Stock-in-Trade (inventories) 40,000
Goodwill 20,000
Provision for Tax 60,000
Totalling of Balance Sheet is not required

Answer:

Balance Sheet
as at …
Note Amount
Particulars
No. ( `)
I. Equity and Liabilities
1. Shareholders’ Funds –
2. Non-Current Liabilities
Long-term Borrowings 1 1,90,000
3. Current Liabilities
Short-term Provisions 2 6,000
Total
II Assets
1. Non-Current Assets
Intangible (Fixed Assets) 3 20,000
2. Current Assets
a. Inventories 4 40,000
 Total

NOTES TO ACCOUNTS
Note Amount
Particulars
No. ( `)
1 Long-term Borrowings
10% Debentures 1,90,000
2 Short-term Provisions
Provision for Tax 6,000
3 Intangible (Fixed Assets)
Goodwill 20,000
4 Inventories
Stock-in-Trade 40,000

Question 23:
Prepare Balance Sheet of VT Ltd. as at 31st March 2022, from the following information as per
Schedule III, Part I of the Companies Act, 2013:

` `
General Reserve 3,000 Fixed Assets: Tangible Assets (Cost) 9,000
8% Debentures 3,000 Other Current Liabilities 2,500
Surplus, i.e., Balance in Statement of
1,200 Share Capital 5,000
Profit and Loss (Credit)
Depreciation of Fixed Assets 700 Other Current Assets 6,400
Answer:

Balance Sheet
as at March 31, 2022
Note
Particulars ( `)
No.
I Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital 1 5,000
b. Reserves and Surplus 2 4,200
2. Non-Current Liabilities
Long-term Borrowings 3 3,000
3. Current Liabilities
Other Current Liabilities 2,500
Total 14,700
II Assets
1. Non-Current Assets
Fixed Assets (Tangible Assets) 4 8,300
2. Current Assets
Other Current Assets 6,400
Total 14,700
 NOTES TO ACCOUNTS
Note
Particulars ( `)
No.
1 Share Capital
Share Capital 5,000
2 Reserves and Surplus
General Reserve 3,000
Balance in Statement of Profit and Loss (Credit) 1,200
4,200
3 Long-term Borrowings
8% Debentures 3,000
4 Fixed Assets
Tangible Assets (Cost) 9,000
Depreciation (700) 8,300

Question 24:
From the following information extracted from the books of Howrach Ltd., prepare Balance
Sheet of the company as at 31st March, 2022 as per Schedule III of the Companies Act, 2013:
( ` in '000) ( ` in '000)
Long-term Borrowings 1,000 Fixed Assets (Tangible) 1,600
Trade Payable 60 Inventories 40
Share Capital 800 Trade Receivables 160
Reserves and Surplus 180 Cash and Cash Equivalents 240
Answer:

Balance Sheet of Howrach Ltd.

as at March 31, 2022
Note
Particulars ( ` in ‘000)
No.
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital 800
b. Reserves and Surplus 180
2. Non-Current Liabilities
Long-term Borrowings 1,000
3. Current Liabilities
Trade Payables 60
Total 2,040
II. Assets
1. Non-Current Assets
Fixed Assets (Tangible Assets) 1,600
2. Current Assets
Inventories 40
Trade Receivables 160
 Cash and Cash Equivalents 240
Total 2,040

Question 25:
Prepare Balance Sheet of HP Ltd. as at 31st March, 2022 from the following information:
` `
Surplus, i.e., Balance in Statement of Profit
Equity Share Capital 20,00,000 3,00,000
and Loss (Cr.)
12% Preference Share Capital 10,00,000 Stock 6,00,000
Fixed Assets (At cost) 46,60,000 Sundry Debtors 8,00,000
Accumulated Depreciation 16,60,000 Cash 1,50,000
Investments 4,00,000 Loans and Advances 50,000
Current Liabilities 8,00,000 Provision for Taxation 2,00,000
12% Debentures 6,00,000 Workmen Compensation Reserve 1,00,000

Answer:

Balance Sheet of HP Ltd.

as at March 31, 2022
Note
Particulars ( `)
No.
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital 1 30,00,000
b. Reserves and Surplus 2 4,00,000
2. Non-Current Liabilities
a. Long-term Borrowings 3 6,00,000
3. Current Liabilities
a. Other Current Liabilities 4 8,00,000
b. Short-term Provisions 5 2,00,000
Total 50,00,000
II Assets
1. Non-Current Assets
a. Fixed Assets
i) Tangible Assets 6 30,00,000
b. Non-Current Investments 7 4,00,000
2. Current Assets
a. Inventories 8 6,00,000
b. Trade Receivables 9 8,00,000
c. Cash and Cash Equivalents 10 1,50,000
d. Short-term Loans and Advances 11 50,000
Total 50,00,000

NOTES TO ACCOUNTS
 Note Amount
Particulars
No. ( `)
1 Share Capital
Equity Share Capital 20,00,000
12% Preference Share Capital 10,00,000
30,00,000
2 Reserves and Surplus
Workmen Compensation Reserve 1,00,000
Balance in Statement of Profit and Loss (Credit) 3,00,000
4,00,000
3 Long-term Borrowings
12% Debentures 6,00,000
4 Other Current Liabilities
Current Liabilities 8,00,000
5 Short-term Provisions
Provision for Taxation 2,00,000
6 Tangible Assets
Fixed Assets (Cost) 46,60,000
Depreciation (16,60,000) 30,00,000
7 Non-Current Investments
Investments 4,00,000
8 Inventories
Stock 6,00,000
9 Trade Receivables
Sundry Debtors 8,00,000
10 Cash and Cash Equivalents
Cash 1,50,000
11 Short-term Loans and Advances
Loans and Advances 50,000

Question 26:

Under which head following revenue items of a non-financial company will be classified or
shown:
(i) Sales; (ii) Revenue from Services Rendered; (iii) Sale of Scrap; (iv) Interest Earned on Loans;
and (v) Gain (profit) on Sale of Investments?

Answer:

ITEMS HEAD
Sales
Revenue from services rendered
Sale of scrap
Interest earned or Loans
Profit on Sale of Investment
Revenue from Operations
Revenue from Operations
Revenue from Operations
Other Income
Other Income

Question 27:
Calculate Cost of Materials Consumed from the following:
Opening Inventory of Materials `5,00,000; Purchase of Materials `25,00,000; and Closing
Inventory of Materials `4,00,000.

Answer:
Cost of material consumed = Opening Inventory of Materials + Purchase of M
- Closing Inventory of Materials
= 5,00,000+25,00,000-400,000
= 26,00,000
Cost of material consumed = 26,00,000

Question 28:
Calculate Cost of Materials Consumed from the following:
Opening Inventory of Materials `3,50,000; Finished Goods `75,000; Stock-in-Trade `2,00,000;
Closing Inventory of: Materials `3,25,000; Finished Goods `85,000; Stock-in-Trade `1,50,000;
Purchases during the year: Raw Material `17,50,000; Stock-in-Trade `9,00,000.
Answer:

Cost of material consumed = Opening Inventory of Materials + Purchase of M

- Closing Inventory of Materials
= 3,50,000+17,50,000-3,25,000
= 17,75,000
Cost of material consumed = 17,75,000

Note: Opening Inventory of Finished Goods and Closing Inventory of Finished Goods will not
be considered as these are shown under Change in Inventory of Finished Goods. Also, Opening,
Closing and Purchases of Stock-in-Trade are not considered as they are not part of cost of
materials consumed.

Question 29:
From the following information of Hospitality Ltd. for the year ended 31st March, 2018,
calculate amount that will be shown in the Note to Accounts on Changes in inventiories of
Finished Goods, WIP and stock-in-Trade:
Particulars Opening Inventory ( `) Closing inventory( `)
Finished Goods 5,00,000 5,50,000
Work-in-Progress 4,50,000 4,25,000
 Stock-in-Trade 6,50,000 6,00,000
Answer:
NOTES TO ACCOUNTS
Note
Particulars ( `)
No.
Change in Inventories of Finished Goods, WIP
and Stock-in-Trade
(a) Finished Goods
Opening Inventory 5,00,000
Less: Closing Inventory 5,50,000 (50,000)
(50,000)
(b) Work-in-Progress
Opening Inventory 4,50,000
Less: Closing Inventory 4,25,000 25,000
25,000
(c) Stock-in-Trade
Opening Inventory 6,50,000
Less: Closing Inventory 6,00,000 50,000
50,000
Net Change (a+b+c) 25,000

` 25,000 will be shown in the Statement of Profit and Loss against the Change in Inventories of
Finished Goods, Work-in-Progress and Stock-in-Trade.