Multiple choice

Directions: Choose the correct option for the given question.

Under the heading 'Secured Loans', the following are disclosed

  1. Loans and Advances from banks.
  2. Debentures.
  3. Loans and Advances from subsidiaries.
  4. Other loans and advances. What is the correct chronological order of disclosure of the items given above in balance sheet of a company?

  1. 3 - 1 - 2 - 4

  2. 2 - 4 - 3 - 1

  3. 3 - 4 - 2 - 1

  4. 2 - 1 - 3 - 4
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under 'Secured Loans' in the balance sheet, debentures (being long-term secured instruments) are disclosed first, followed by loans from banks (secured against assets). Loans from subsidiaries come next, with 'Other loans and advances' disclosed last. This order reflects the typical hierarchy of secured borrowing, from most formal to least formal.

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