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CA Intermediate · Advanced Accounting · Financial Statements of Companies

Mehta Textiles Ltd. has a balance of ₹4,00,000 in 'Unpaid Dividend Account' and ₹6,50,000 as 'Security deposits received from dealers, repayable after 3 years'. Under Schedule III (Division I), where should these appear in the Balance Sheet?

Unpaid dividend is shown under current liabilities as other current liabilities, while security deposits repayable after three years are shown under non-current liabilities as other long-term liabilities, because classification depends on the settlement period of twelve months from the reporting date.

  1. AUnpaid dividend under current liabilities (other current liabilities); dealer deposits under non-current liabilities (other long-term liabilities)Correct
  2. BBoth under non-current liabilities
  3. CUnpaid dividend under non-current liabilities; dealer deposits under current liabilities
  4. DBoth under current liabilities as other current liabilities

Explanation

Unpaid dividends are payable on demand and are shown as other current liabilities. Deposits repayable after three years (beyond 12 months) are other long-term liabilities under non-current liabilities. Option D wrongly classifies the dealer deposits by nature rather than by repayment date.

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