Current and Non-Current Liabilities Quiz

Which of the following is classified as a current liability?

• Bank loan payable after 5 years

• Trade creditors

• Share capital

• Goodwill

What is the primary difference between current liabilities and non-current liabilities?

• Current liabilities are due within 12 months; non-current liabilities are due after 12 months.

• Non-current liabilities are paid before current liabilities.

• Current liabilities are more important than non-current liabilities.

• Non-current liabilities refer only to equity items.

Which of the following liabilities is most likely to be classified as a non-current liability?

• Accounts payable

• Bank overdraft

• Mortgage loan payable after 3 years

• Accrued expenses

When preparing financial statements, what should be included in the equity section?

• Cash and cash equivalents

• Share capital and retained earnings

• Trade payables

• Short-term loans

A liability is considered 'current' if it is expected to be settled within:

• 6 months

• 1 year

• 2 years

• 5 years

Which of the following represents an example of non-current equity?

• Retained earnings

• Bonds payable

• Trade receivables

• Bank overdraft

When preparing the procedures for current liabilities, which of the following would be considered a proper account to recognize?

• Notes payable within 90 days

• Long-term lease obligations

• Debenture bonds payable after 10 years

• Equity contributions

Which of the following financial elements would be classified as non-current liabilities?

• Bank loan due within 6 months

• Wages payable

• Bonds payable in 5 years

• Income tax payable

When accounting for non-current liabilities, which of the following actions should be taken?

• Recognize the full amount of the liability as current

• Recognize the liability over its term, breaking it into current and non-current portions

• Only recognize the portion due within 12 months

• Eliminate the liability if the payment term exceeds 12 months

What is the typical treatment for dividends payable in the financial statements?

• Recognize as non-current liability

• Recognize as equity

• Recognize as current liability

• Recognize as income