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Question

How the following liabilities are to be shown on the liability side of the balance sheet in the order of permanence ?
1. Current liabilities and provisions
2. Secured loans
3. Share capital
4. Unsecured loans
5. Reserves and surplus

A
3, 5, 2 , 4 , 1
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B
3 , 2 , 1 , 4 , 5
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C
1 , 4 , 2 , 5 , 3
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D
5, 4, 3, 2, 1
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Solution

The correct option is B 3, 5, 2 , 4 , 1
Order of permanence is where assets or liabilities are shown in the balance sheet in the order of permanence, the more permanent the asset or liability the earlier they appear in the balance sheet.
3) Share Capital
5) Reserves and Surplus
2) Secured loans
4) Unsecured Loans
1)Current liabilities and provisions.

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