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Profit and Loss › Balance sheet format
Balance sheet format for a small business
The headings of a balance sheet in order, what goes under each, and the same shop on 31 March worked out to equal totals.
The two halves
A balance sheet shows on one date what the business owns (assets) and where the money for it came from (the owner's funds and what is owed to others). The two totals are always equal. Schedule III (Division I) and ICAI's format for non-corporate entities list them in this order:
| Heading | What goes in it |
|---|---|
| Owner's funds (share capital and reserves for a company) | Capital at the start, plus the profit of the year, less drawings (money and goods the owner took out). |
| Non-current liabilities: long-term borrowings | Loans repayable after more than twelve months: term loans, vehicle loans. |
| Current liabilities: short-term borrowings | Overdraft, cash credit, loan instalments due within twelve months. |
| Trade payables | Suppliers you still owe. Since the 2021 amendment, the notes show dues to micro and small enterprises separately and by age. |
| Other current liabilities | GST payable, TDS deducted and not yet deposited, salary and expenses payable, advances from customers. |
| Property, plant and equipment | Fixed assets at cost less depreciation: furniture, machines, vehicles, computers, building. (Called "tangible assets" before 1 April 2021.) |
| Inventories | Closing stock, at cost or net realisable value, whichever is lower. See closing stock valuation. |
| Trade receivables | Customers who still owe you. |
| Cash and cash equivalents | Cash in hand, bank balances, cheques in hand. |
| Short-term loans, advances and other current assets | Advances to staff or suppliers, deposits, GST input credit not used yet, TDS receivable. |
Worked example: the same shop on 31 March 2026
| Equity and liabilities | Amount (₹) |
|---|---|
| Capital on 1 April 2025 | 3,00,000 |
| Add: profit for the year (from the profit and loss) | 1,15,000 |
| Less: drawings | −75,000 |
| Owner's funds | 3,40,000 |
| Long-term borrowings (bank loan) | 1,00,000 |
| Trade payables | 1,20,000 |
| Other current liabilities (GST payable 15,000, TDS payable 3,000) | 18,000 |
| Total | 5,78,000 |
| Assets | Amount (₹) |
|---|---|
| Property, plant and equipment (furniture 1,50,000 less depreciation 15,000) | 1,35,000 |
| Inventories (closing stock) | 1,80,000 |
| Trade receivables | 1,40,000 |
| Cash and cash equivalents (cash 25,000, bank 88,000) | 1,13,000 |
| Short-term loans and advances (advance to staff) | 10,000 |
| Total | 5,78,000 |
Paying small suppliers on time
Trade payables owed to a micro or small enterprise (registered on Udyam) must be paid within 15 days, or within the agreed time of at most 45 days (section 15 of the MSMED Act, 2006). For income tax, an amount not paid in time is allowed as an expense only in the year it is actually paid: section 43B(h) of the Income-tax Act, 1961 (from 2023-24), carried into section 37(2)(g) of the Income-tax Act, 2025. Look at old supplier dues before the year closes.