Arrange the following in correct sequence in preparation of the Balance sheet of a company.

(A) Non-current Liabilities

(B) Shareholder's Funds

(C) Current Liabilities

(D) Contingent liabilities

Choose the correct answer from the options given below:

1. (D), (B), (C), (A)
2. (B), (A), (C), (D)
3. (B), (A), (D), (C)
4. (C), (B), (D), (A)

As per Schedule III of the Companies Act, 2013, the Balance Sheet of a company follows a prescribed format for presenting Equity and Liabilities.

The correct sequence is:

Shareholder's Funds → This appears first as it represents the owners' equity including Share Capital and Reserves & Surplus.

Non-current Liabilities → These are long-term obligations like long-term borrowings, deferred tax liabilities, and long-term provisions.

Current Liabilities → These are short-term obligations payable within one year, such as short-term borrowings, trade payables, and short-term provisions.

Contingent Liabilities → These are disclosed as notes to accounts at the end of the Balance Sheet, not as part of the main statement, as they represent possible obligations dependent on future events.

The sequence follows the principle of presenting items in order of permanence - from most permanent (Shareholder's Funds) to least permanent (Current Liabilities), with contingent liabilities disclosed separately as they are not actual liabilities but only potential ones.

Therefore, the correct sequence is (B), (A), (C), (D).