Question

Surplus, i.e., Balance in Statement of Profit & Loss is shown in the Balance Sheet under ______.

Options

• Share Capital.

• Reserves and Surplus.

• Other Long-term Liabilities.

• Current Liabilities.

Answer 1

Surplus, i.e., Balance in Statement of Profit & Loss is shown in the Balance Sheet under Reserves and Surplus.

Explanation:

The Surplus is the accumulated net profit or loss generated by a company over time. Under Schedule III of the Companies Act, it is placed under the sub-heading Reserves and Surplus inside Shareholders’ Funds. It belongs here because corporate profits represent internal wealth that belongs completely to the business owners (shareholders), not an external liability.