A liability is a current liability if it satisfies
  • a)
    It is expected to be settled in the company’s normal operating cycle
  • b)
    It is held primarily for the purpose of being traded
  • c)
    It is due to settled within 12 months after reporting date
  • d)
    All of these
Correct answer is option 'D'. Can you explain this answer?

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Answers

Nalini Iyer
Aug 07, 2018
Liabilities are to be classified as current if any one of four specified conditions is met. The conditions are:

a) It expects to settle the liability in its current operating cycle

b) It holds the liability primarily for trading

c) The liability is due to be settled within 12 months

d) It does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

All other liabilities are to be classified as non-current. 

Kirandeep Kaur
Jul 04, 2020
Current liability refers to that which is payable within a revenue year.

Liabilities are to be classified as current if any one of four specified conditions is met. The conditions are:a) It expects to settle the liability in its current operating cycleb) It holds the liability primarily for tradingc) The liability is due to be settled within 12 monthsd) It does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.All other liabilities are to be classified as non-current.
Liabilities are to be classified as current if any one of four specified conditions is met. The conditions are:a) It expects to settle the liability in its current operating cycleb) It holds the liability primarily for tradingc) The liability is due to be settled within 12 monthsd) It does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.All other liabilities are to be classified as non-current.