Question : When the Period of Operating Cycle is more than 12 Months (Say 15 Months): Liabilities due for settlement (payment) within 15 months from the date of the Balance Sheet are classified (shown) as --------------
Option 1: Current liabilities
Option 2: Non – current liabilities
Option 3: Non – current assets
Option 4: None the above
Correct Answer: Non – current liabilities
Solution : Answer = Non – current liabilities
When the operating cycle of a company exceeds 12 months, liabilities due for settlement within this extended period are classified as non-current liabilities on the balance sheet. This adjustment reflects the longer-term nature of the company's financial obligations, aligning with the duration of its operating cycle.
Hence, the correct option is 2.
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