Current v Non-Current Liabilities Flashcards
1
Q
How should we classify trade payables - as a current or non-current liability?
A
Current liability - it probably matches the first definition and would definitely match the second
2
Q
How should we classify tax payables - as a current or non-current liability?
A
Current liability - it definitely matches the first definition
3
Q
How should we classify a bank loan - as a current or non-current liability?
A
It depends on the repayment terms, as it potentially could match the first and third definition (if the repayment is within a year, it is a current liability)
4
Q
How should we classify an overdraft - as a current or non-current liability?
A
Current liability - it matches the third definition. Overdrafts are ‘repayable on demand’
