Question

Given the major heading under which the following items will be shown in a Company’s Balance Sheet as per Schedule VI Part I of companies Act, 1956:

(i) Sundry Creditors; (ii) Provision for tax; (iii) Preliminary Expenses; (iv) Loss Tools; (v) Interest accrued on investment and (vi) Goodwill.

Answer 1

Items	Major Heading
(i) Sundry Creditors	Current Liabilities and Provisions
(ii) Provision for Tax	Current Liabilities and Provisions
(iii) Preliminary Expenses	Miscellaneous Expenditure
(iv) Loose Tools	Current Assets, Loan and Advances
(v) Interest accrued on Investment	Current Assets, Loan and Advances
(vi) Goodwill	Fixed Assets

However, the Company Act has prescribed a new format (Vertical Format) for preparing the Balance Sheet of a company as per Revised Schedule VI Part I of the Companies Act 1956 effective from April 01, 2011. This format mainly consists of the following two heads.

(I) Equity and Liabilities

(II) Assets

Equity and Liabilities are further comprises of-

(a) Shareholders’ Funds

(b) Share Application Money Pending Allotment

(c) Non-Current Liabilities and

(d) Current Liabilities

On the other hand, Assets are classified as-

(a) Non-Current Assets and

(b) Current Assets