Question

Arrange the following liabilities in the order of company balance sheet.
i) Bank Overdraft
ii) Bank Loan
iii) Share Capital
iv) Provision for Taxation

• A. i, ii, iii, iv
• B. iv, iii, ii, i
• C. iii, ii, i, iv
• D. iii, ii, iv, i

Answer 1

Answer: (C)

iii, ii, i, iv

Assets and liabilities are to be shown in the balance sheet in an order. There are two ways of showing the items of assets & liabilities i.e. Order of permanency and order of liquidity. This is also called as marshaling of balance sheet.

Accordingly , items to be shown as :

Share Capital

Bank Loan

Bank Overdarft

Provision for Taxation.