Skip to content

CA Foundation · Accounting · Company Accounts

As at 31 March, Rao Ltd. had the following balances: Trade payables ₹2,40,000; Short-term borrowings ₹1,60,000; Current maturities of long-term debt ₹80,000; Long-term borrowings (excluding current maturities) ₹5,00,000; Provision for tax ₹70,000. What is the total of Current Liabilities as per Schedule III?

Current liabilities total ₹5,50,000. This is the sum of short-term borrowings ₹1,60,000, trade payables ₹2,40,000, current maturities of long-term debt ₹80,000 and provision for tax ₹70,000. Long-term borrowings are non-current and are excluded.

  1. A₹5,50,000Correct
  2. B₹4,80,000
  3. C₹10,50,000
  4. D₹5,00,000

Explanation

Current liabilities include short-term borrowings, trade payables, other current liabilities (current maturities of long-term debt) and short-term provisions. Total = 1,60,000 + 2,40,000 + 80,000 + 70,000 = ₹5,50,000. Omitting the provision for tax gives ₹4,80,000, which is wrong because the provision is a short-term provision.

Did you get it right without looking?

One question tells you little. A timed set on Company Accounts shows your real accuracy, how long you take and where you lose marks.

Practise Company AccountsFree diagnostic mock

More Company Accounts questions