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CMA Foundation · Fundamentals of Financial and Cost Accounting · Four Frameworks of Accounting and Forms of Organization

Sunrise Textiles Ltd's financial statements follow Schedule III of the Companies Act, 2013. Which of the following would be shown in the Balance Sheet rather than the Statement of Profit and Loss?

Trade receivables of ₹3,20,000 are shown in the Balance Sheet because they are an asset, specifically a current asset. Employee benefit expense, finance costs and revenue from operations are income or expense items, so they belong in the Statement of Profit and Loss under Schedule III.

  1. AEmployee benefit expense of ₹5,00,000
  2. BFinance costs of ₹80,000
  3. CTrade receivables of ₹3,20,000Correct
  4. DRevenue from operations of ₹40,00,000

Explanation

Trade receivables are an asset, so they appear in the Balance Sheet under current assets. Employee benefit expense, finance costs and revenue from operations are all items of income or expense reported in the Statement of Profit and Loss.

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