Question

The following information was extracted from the books of Mask Ltd. answer the question (In accordance with the provisions of the Companies Act, 2013):

Particulars	₹
10% Debentures payable after 3 years	5,00,000
10% Bank Loan from PNB repayable after 4 years	2,50,000
Stock-in-Trade (Inventories)	1,00,000
Goodwill	1,25,000
Computer Software under Development	1,25,000
Provision for Tax	1,50,000

10% Debentures will be shown under ______ head of the Equity and Liabilities part of the Balance Sheet.

Options

• Shareholders’ Funds

• Non-current Liabilities

• Current Liabilities

• None of these.

Answer 1

10% Debentures will be shown under Non-current Liabilities head of the Equity and Liabilities part of the Balance Sheet.

Explanation:

According to Schedule III, Part I of the Companies Act, 2013, 10% Debentures represent a long-term borrowing that is repayable after 3 years (beyond 12 months). Since it is a long-term debt obligation of the company, it is strictly disclosed under the main head Non-current Liabilities (and specifically under the sub-head Long-term Borrowings).