Match List - I with List - II:

List - I	List - II
A. Securities premium	I. Current liabilities
B. Patent	II. Current Assets
C. Short-term loan and advances	III. Intangible Assets
D. Trade payable	IV. Reserve and surplus

Choose the correct answer from the options given below:

Correct option is B

1. Securities Premium → Reserve and Surplus (A - IV)

• Securities Premium is the amount received by a company over and above the face value of its shares.
• It is recorded under "Reserve and Surplus" on the liabilities side of the balance sheet.
• It can be used for issuing bonus shares, writing off preliminary expenses, etc.

2. Patent → Intangible Assets (B - III)

• A patent is an exclusive legal right granted for an invention, allowing the patent holder to use or license it for a specific period.
• It is classified as an intangible asset because it does not have a physical form but has value.

3. Short-term Loans and Advances → Current Assets (C - II)

• Short-term loans and advances include advances to employees, prepaid expenses, and short-term financial assistance given by a company.
• Since these loans and advances are recoverable within a year, they fall under current assets.

4. Trade Payable → Current Liabilities (D - I)

• Trade payables represent amounts a company owes to its suppliers for goods or services purchased on credit.
• These obligations are due within one year and are classified under current liabilities in the balance sheet.

Thus, the correct matching is:

• A - IV (Securities Premium → Reserve and Surplus)
• B - III (Patent → Intangible Assets)
• C - II (Short-term Loan and Advances → Current Assets)
• D - I (Trade Payable → Current Liabilities)

Information Booster:

1. Securities Premium (Reserve and Surplus)

   • It arises when shares are issued at a price higher than their face value.
   • It can be used for purposes like issuing fully paid bonus shares, writing off underwriting expenses, etc.

2. Patent (Intangible Asset)

   • Other examples of intangible assets include copyrights, trademarks, goodwill, and brand value.
   • Intangible assets provide economic benefits but lack physical presence.

3. Short-term Loans and Advances (Current Assets)

   • These include loans to employees, prepaid expenses, and short-term deposits.
   • They are expected to be recovered within 12 months.

4. Trade Payables (Current Liabilities)

   • These represent the amounts owed to suppliers for goods and services received but not yet paid for.
   • They are short-term obligations, usually settled within a year.