In which order the following items will be shown on the liabilities side of the Balance Sheet of a Company: 1. Current liabilities and provisions 2. Secured loans 3. Share capital 4. Reserves and surplus Select the correct answer:

The correct answer is: D. 3, 4, 1, 2

The liabilities side of a balance sheet is typically divided into two sections: current liabilities and non-current liabilities. Current liabilities are those that are due within one year, while non-current liabilities are those that are due after one year.

Share capital is a company’s equity, which is the amount of money that shareholders have invested in the company. Reserves and surplus are the accumulated profits of the company, which are not distributed to shareholders.

Secured loans are loans that are secured by collateral, such as property or equipment. Unsecured loans are loans that are not secured by collateral.

Therefore, the order in which the items will be shown on the liabilities side of the balance sheet is:

1. Share capital
2. Reserves and surplus
3. Secured loans
4. Current liabilities and provisions

Here is a brief explanation of each option:

• Option A: This option is incorrect because it shows reserves and surplus before share capital. Reserves and surplus are the accumulated profits of the company, which are not distributed to shareholders. Share capital is the amount of money that shareholders have invested in the company, and it is therefore a more important liability than reserves and surplus.
• Option B: This option is incorrect because it shows secured loans before current liabilities and provisions. Secured loans are loans that are secured by collateral, such as property or equipment. Current liabilities are those that are due within one year, and they are therefore a more important liability than secured loans.
• Option C: This option is incorrect because it shows reserves and surplus before share capital. Reserves and surplus are the accumulated profits of the company, which are not distributed to shareholders. Share capital is the amount of money that shareholders have invested in the company, and it is therefore a more important liability than reserves and surplus.
• Option D: This option is correct because it shows the items in the correct order. Share capital is the amount of money that shareholders have invested in the company. Reserves and surplus are the accumulated profits of the company, which are not distributed to shareholders. Secured loans are loans that are secured by collateral, such as property or equipment. Current liabilities are those that are due within one year.