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.
Question : When Period of Operating Cycle is less than 12 Months: Liabilities due for settlement (payment) within 12 months from the date of Balance Sheet are classified (shown) as ------------------
Question : Due to be Settled within 12 Months from the Date of the Balance Sheet: A liability is classified or shown as ------.
Question : If the Expected Payment period is more than the period of the Operating Cycle and after 12 months from the date of the Balance Sheet.
Question : ---------------- are the assets which are likely to be converted into cash or cash equivalents within 12 months from the date of the Balance Sheet or within the period of an operating cycle.
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