Question

Match the items given in Column I with the headings and subheadings (balance sheet) as defined in schedule III of Companies Act, 2013.

Column I	Column II
i. Spares	a. Intangible fixed assets
ii. Copyrights	b. Other current assets
iii. Prepaid salary	c. Long-term borrowings
iv. Bank loan	d. Inventories
v. Furniture	e. Tangible fixed assets

Choose the correct option.

[0.88 marks]

• A. (I)-(a), (II)-(b), (III)- (d), (IV)- (c), (V)-(e)
• B. (I)-(d), (II)- (a), (III)-(b), (IV)- (c), (V)-(e)
• C. (I)-(d), (II)- (a), (III)-(b), (IV)-(e), (V)-(c)
• D. (I)- (e), (II)- (d), (III)- (a), (IV)-(b), (V)-(b)

Answer 1

The correct option is B (I)-(d), (II)- (a), (III)-(b), (IV)- (c), (V)-(e)

• Intangible fixed assets are those long-term assets that do not have any physical existence. Example: patents, copyrights, mining rights, etc.
• Other current assets are those short-term assets that do not have a specific category in a balance sheet, such as prepaid expenses.
• Long-term borrowing means borrowing held in a business for a period of more than 12 months or an operating cycle. Example: bank loans, debentures, etc.
• Inventories refer to unsold stock of finished goods as well as all raw materials, work-in-progress, spares, loose tools, etc.
• Tangible fixed assets are those long-term assets that have physical existence. Example: plant and machinery, furniture, computer, building, etc.