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 ------------------
Option 1: Current liabilities
Option 2: Non – current liabilities
Option 3: Non – current assets
Option 4: None of the above
Correct Answer: Current liabilities
Solution : Answer = Current liabilities
When the period of the operating cycle is less than 12 months, liabilities due for settlement within 12 months from the date of the balance sheet are classified as current liabilities. This classification ensures that obligations expected to be settled within the short term are appropriately reflected on the balance sheet. Hence, the correct option is 1.
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 --------------
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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