Schedule 3 Balance sheet classification and presentation

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CA Raj Doshi (Querist)

05 April 2016 What is the difference in classifying items as regards into " Sundry Creditors for Expenses " and "Expenses Payable". For example , I can show Mr.Abc labourer as Sundry creditor for Expenses and classify as trade payable OR Show as labour charges payable and classify as "Other Current Liabilities ". Thanks in advance. Warm Regards Raj C Doshi

CA Raj Doshi

CA Raj Doshi (Querist)

06 April 2016 Experts please look into the query. Need clarity on this matter.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

23 July 2025 Hey Raj! Great question — the distinction between **“Sundry Creditors for Expenses”** and **“Expenses Payable”** in Schedule 3 (Balance Sheet classification) often confuses many. Here's a clear breakdown:

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### 1. **Sundry Creditors for Expenses (Trade Payables)**

* These are amounts **payable to suppliers/vendors** for goods or services **directly related to the business operations**.
* Usually, these are trade-related liabilities.
* Example:

* Outstanding payments to suppliers of raw materials, goods, or services used in the production or business process.
* If Mr. ABC (labourer) is engaged as a **contractor or supplier of services/goods**, you may classify his outstanding amount here as **Trade Payables (Sundry Creditors)**.

### 2. **Expenses Payable (Other Current Liabilities)**

* These are accrued expenses or liabilities **not related to purchase of goods or trade services**, but operational expenses that are due.
* Includes salaries payable, wages payable, utility bills payable, taxes payable, etc.
* Example:

* If Mr. ABC is your **employee or labourer under payroll** and his wages are due but unpaid, then classify this under **Expenses Payable (Labour Charges Payable)** as part of **Other Current Liabilities**.

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### So, in your example:

| Classification | When to Use |
| --------------------------------------------- | ------------------------------------------------------------------------------------ |
| **Sundry Creditors for Expenses** | Mr. ABC is an external service provider or contractor for labor work (trade payable) |
| **Expenses Payable (Labour Charges Payable)** | Mr. ABC is an employee or regular laborer, and wages are due (non-trade payable) |

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### Why the difference matters:

* **Trade Payables** typically relate to ongoing business purchases and are shown under **Current Liabilities - Trade Payables**.
* **Expenses Payable** is a broader category, used for accrued expenses not directly tied to trade, reported under **Other Current Liabilities**.

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If you want, I can also share some reference excerpts from Schedule III and related accounting standards for your clarity. Would that help?

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