Question : 'Loan', 'Loan on Mortgage' and 'Bank Loan' are____________therefore, these should not be included in______________.
Option 1: Short term borrowing, current liabilities
Option 2: Long term borrowing, non- current liabilities
Option 3: Long term borrowing, current liabilities
Option 4: None of the above
Answer (1)
19th Jan, 2024
Correct Answer: Long term borrowing, current liabilities
Solution : Answer = Long-term borrowing, current liabilities
'Loan', 'Loan on Mortgage', and 'Bank Loan' are long-term borrowings. Therefore, they should not be included in current liabilities but rather in long-term liabilities since they are obligations payable beyond the next 12 months.
Hence, the correct option is 3.
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