Classification of Accounts

The difference between a current and non-current liability is that _____________.

• Current liability value is below $50,000 while non-current liability value is above $50,000.

• Current liability are amounts that is due to be paid within one financial year while non-current liability are amounts that are due to be paid beyond one financial year

• Businesses will classify smaller liabilities as current liabilities and larger ones as non-current liabilities

• Current liability is not a source of funds while non-current liability is a source of funds

The difference between a current asset and a non-current asset is that __________________. (more than 1 answers allowed)

• current assets are easily converted to cash while non-current assets are not

• current asset provides benefits that are used within one financial year and non-current asset provide benefits that last beyond one financial year

• non-current assets are purchased using borrowings while current assets are purchased using the owner's own funds

• non-current asset provides benefits that are used within one year and current asset provide benefits that last beyond one year

Capital is reflected in the Statement of Financial Position under ___________.

• Non-current asset

• Non-current liability

• Current liability

• Equity

Utilities expense is reflected under which section of the Statement of Financial Position?

• Non-current asset

• Current asset

• Equity

• None of the above

Motor vehicle is classified under which section of the Statement of Financial Position?

• Non-current asset

• Current asset

• Non-current liability

• Current liability

Discounts received is classified in the Statement of Financial Position under ________________.

• Current assets

• Current liabilities

• Non-current assets

• None of the above

Which of the following accounts are classified under current liability? (there can be more than 1 answer)

• Bank overdraft

• Bank loan

• Trade payable

• Drawings

Which of the following are non-current assets? (more than 1 answers allowed)

• Office equipments

• Inventory

• Trade receivable

• Fixtures and fittings

Which of the following are current liabilities? (More than 1 answers allowed)

• Trade payable

• Bank overdraft

• Rent expense

• Discount received

Fixtures and fittings are classified under __________________ in the Statement of Financial Position.

• Current liabilities

• Current assets

• Non-current assets

• Non-current liabilities