Classify the following items in the balance sheet of a company under Major heads and Sub-heads:

| S. No. | Items |
|---|---|
| 1. | Goodwill |
| 2. | Forfeited shares |
| 3. | Acceptances |
| 4. | Preliminary expenses |
| 5. | Capital reserve |
| 6. | Loans from banks |
| 7. | I

Question

Classify the following items in the balance sheet of a company under Major heads and Sub-heads:

| S. No. | Items |
|---|---|
| 1. | Goodwill |
| 2. | Forfeited shares |
| 3. | Acceptances |
| 4. | Preliminary expenses |
| 5. | Capital reserve |
| 6. | Loans from banks |
| 7. | Investment in shares and debentures |
| 8. | Interest accrued and due on debentures |
| 9. | Interest accrued but not due on Secured Loans |
| 10. | Interest accrued but not due on Unsecured Loans |
| 11. | Interest accrued on Investments |
| 12. | Surplus |
| 13. | Securities Premium Reserve |
| 14. | Loose Tools |
| 15. | Provision for Taxation |
| 16. | Under writing Commission |
| 17. | Bills of Exchange |
| 18. | Unclaimed dividend |
| 19. | Short term loans & advances |
| 20. | Live stock |
| 21. | Calls unpaid/calls in arrears |
| 22. | Uncalled liability on shares partly paid |
| 23. | Pre-paid Insurance |
| 24. | Stores and spare parts |
| 25. | Advances from customers |
| 26. | Debentures redemption reserve |
| 27. | Premium on redemption of debentures |
| 28. | Loss on issue of debentures |
| 29. | Debentures redemption fund |
| 30. | Debentures redemption fund investment |
| 31. | Vehicles |
| 32. | Advances to suppliers |
| 33. | Patents, trademarks, design |
| 34. | Calls in advance |
| 35. | Deposits with custom authorities |
| 36. | Arrears of fixed cumulative dividend |
| 37. | Furniture and fittings |
| 38. | Brokerage on issues of shares |
| 39. | Statement of profit & loss (Dr.) |
| 40. | Capital work-in-progress |
| 41. | Provision for doubtful debts |
| 42. | Statement of profit & loss (Cr.) |
| 43. | Uncalled liability on partly paid shares held as investments |
| 44. | Claims against the company not acknowledged as debt |
| 45. | Capital redemption reserve |
| 46. | Public deposits |
| 47. | Authorised Capital |

Accepted Answer

> [!TLDR]
> Every item is assigned to its Schedule III major head and sub-head below. Watch four kinds of items: adjustments inside Share Capital (calls-in-arrears, forfeited shares, authorised capital), fictitious assets written off (preliminary/underwriting/brokerage/loss on issue), deductions from another line (provision for doubtful debts), and contingent liabilities disclosed only in the notes.

### Concept

The Schedule III Balance Sheet has two major sections — **Equity and Liabilities** (Shareholders' Funds, Non-current Liabilities, Current Liabilities) and **Assets** (Non-current Assets, Current Assets). Classifying an item means naming both its major head and its specific sub-head. Some items never appear on the face: **contingent liabilities** (a liability that may or may not arise) are disclosed only in the Notes to Accounts, and some items are **deductions** from another line rather than lines of their own.

### Solution — Classification

| S.No. | Item | Major Head | Sub-head |
|---|---|---|---|
| 1 | Goodwill | Non-current Assets | Fixed Assets — Intangible Assets |
| 2 | Forfeited shares | Shareholders' Funds | Share Capital (added to Subscribed Capital) |
| 3 | Acceptances | Current Liabilities | Trade Payables (Bills Payable) |
| 4 | Preliminary expenses | Non-current Assets | Other Non-current Assets |
| 5 | Capital reserve | Shareholders' Funds | Reserves and Surplus |
| 6 | Loans from banks | Non-current Liabilities | Long-term Borrowings |
| 7 | Investment in shares and debentures | Non-current Assets | Non-current Investments |
| 8 | Interest accrued and due on debentures | Current Liabilities | Other Current Liabilities |
| 9 | Interest accrued but not due on Secured Loans | Current Liabilities | Other Current Liabilities |
| 10 | Interest accrued but not due on Unsecured Loans | Current Liabilities | Other Current Liabilities |
| 11 | Interest accrued on Investments | Current Assets | Other Current Assets |
| 12 | Surplus | Shareholders' Fun

Balance Sheet Item	Originates From	Debit/Credit Nature
Capital	Capital Account	Credit balance (owner's claim)
Reserves & Surplus	Profit & Loss Appropriation Account	Credit balance (undistributed profit)
Long-term Borrowings	Loan Account (e.g., Bank Loan)	Credit balance (liability)
Trade Payables	Creditors Account	Credit balance (amount owed)
Fixed Assets	Asset Account (e.g., Machinery A/c)	Debit balance (what the business owns)
Inventories	Stock Account	Debit balance (goods on hand)
Trade Receivables	Debtors Account	Debit balance (amounts due from customers)
Cash & Bank	Cash/Bank Account	Debit balance (positive cash)

Concept understanding — Balance Sheet Presentation

Balance Sheet Presentation – A First Look

Why Does It Matter?

The Format (as per NCERT Class 12)

Accounting Treatment – What Gets Debited/Credited?

Concept

Solution — Classification

S. No.	Items
1.	Goodwill
2.	Forfeited shares
3.	Acceptances
4.	Preliminary expenses
5.	Capital reserve
6.	Loans from banks
7.	Investment in shares and debentures
8.	Interest accrued and due on debentures
9.	Interest accrued but not due on Secured Loans
10.	Interest accrued but not due on Unsecured Loans
11.	Interest accrued on Investments
12.	Surplus
13.	Securities Premium Reserve
14.	Loose Tools
15.	Provision for Taxation
16.	Under writing Commission
17.	Bills of Exchange
18.	Unclaimed dividend
19.	Short term loans & advances
20.	Live stock
21.	Calls unpaid/calls in arrears
22.	Uncalled liability on shares partly paid
23.	Pre-paid Insurance
24.	Stores and spare parts
25.	Advances from customers
26.	Debentures redemption reserve
27.	Premium on redemption of debentures
28.	Loss on issue of debentures
29.	Debentures redemption fund
30.	Debentures redemption fund investment
31.	Vehicles
32.	Advances to suppliers
33.	Patents, trademarks, design
34.	Calls in advance
35.	Deposits with custom authorities
36.	Arrears of fixed cumulative dividend
37.	Furniture and fittings
38.	Brokerage on issues of shares
39.	Statement of profit & loss (Dr.)
40.	Capital work-in-progress
41.	Provision for doubtful debts
42.	Statement of profit & loss (Cr.)
43.	Uncalled liability on partly paid shares held as investments
44.	Claims against the company not acknowledged as debt
45.	Capital redemption reserve
46.	Public deposits
47.	Authorised Capital

S.No.	Item	Major Head	Sub-head
1	Goodwill	Non-current Assets	Fixed Assets — Intangible Assets
2	Forfeited shares	Shareholders' Funds	Share Capital (added to Subscribed Capital)
3	Acceptances	Current Liabilities	Trade Payables (Bills Payable)
4	Preliminary expenses	Non-current Assets	Other Non-current Assets
5	Capital reserve	Shareholders' Funds	Reserves and Surplus
6	Loans from banks	Non-current Liabilities	Long-term Borrowings
7	Investment in shares and debentures	Non-current Assets	Non-current Investments
8	Interest accrued and due on debentures	Current Liabilities	Other Current Liabilities
9	Interest accrued but not due on Secured Loans	Current Liabilities	Other Current Liabilities
10	Interest accrued but not due on Unsecured Loans	Current Liabilities	Other Current Liabilities
11	Interest accrued on Investments	Current Assets	Other Current Assets
12	Surplus	Shareholders' Funds	Reserves and Surplus
13	Securities Premium Reserve	Shareholders' Funds	Reserves and Surplus
14	Loose Tools	Current Assets	Inventories
15	Provision for Taxation	Current Liabilities	Short-term Provisions
16	Underwriting Commission	Non-current Assets	Other Non-current Assets
17	Bills of Exchange	Current Assets	Trade Receivables (Bills Receivable)
18	Unclaimed dividend	Current Liabilities	Other Current Liabilities
19	Short term loans & advances	Current Assets	Short-term Loans and Advances
20	Live stock	Non-current Assets	Fixed Assets — Tangible Assets
21	Calls unpaid/calls in arrears	Shareholders' Funds	Share Capital (deducted from Subscribed Capital)
22	Uncalled liability on shares partly paid	Contingent Liabilities & Commitments	Notes to Accounts (contingent liability)
23	Pre-paid Insurance	Current Assets	Other Current Assets
24	Stores and spare parts	Current Assets	Inventories
25	Advances from customers	Current Liabilities	Other Current Liabilities
26	Debentures redemption reserve	Shareholders' Funds	Reserves and Surplus
27	Premium on redemption of debentures	Non-current Liabilities	Other Long-term Liabilities
28	Loss on issue of debentures	Non-current / Current Assets	Other Non-current Assets (current portion: Other Current Assets)
29	Debentures redemption fund	Shareholders' Funds	Reserves and Surplus
30	Debentures redemption fund investment	Non-current Assets	Non-current Investments
31	Vehicles	Non-current Assets	Fixed Assets — Tangible Assets
32	Advances to suppliers	Current Assets	Short-term Loans and Advances
33	Patents, trademarks, design	Non-current Assets	Fixed Assets — Intangible Assets
34	Calls in advance	Current Liabilities	Other Current Liabilities
35	Deposits with custom authorities	Non-current Assets	Long-term Loans and Advances

Concept

Solution — Classification

🎓Unlock everything free for 14 days

Unlock everything free for 14 days