PRC-1 · Chapter 10 · Question 60 of 100
A long-term bank loan of Rs. 12,000 is fully repayable within the next 12 months. How must this be classified in the Statement of Financial Position?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) As a Current Liability.
Explanation
Obligations that are due to be settled within 12 months after the reporting period must be classified as current liabilities, regardless of their original long-term nature.
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