Select the sub-head under which loose tools will be shown in the balance sheet of a company.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Inventories
Loose tools are small tools held for use in production and are not treated as fixed assets. In the balance sheet of a company they are shown under Current Assets, in the sub-head Inventories, as the book’s solution shows.
Why the other options are incorrect
Option (1) Current assets — Incorrect. Current assets is the main head; the sub-head asked for is Inventories.
Option (2) Trade receivables — Incorrect. These are amounts due from customers, not goods held.
Option (4) Other current assets — Incorrect. This sub-head is for current assets that fit no other sub-head; loose tools have their own place under Inventories.
NCERT (2026-27 edition):
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