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P2 C3 COMPANY FINAL ACCOUNT — Elements of Account STD 12 Commerce — Question

Gujarat BoardEnglish MediumSTD 12 CommerceElements of AccountP2 C3 COMPANY FINAL ACCOUNT1 Mark
Question
What is current liability and non-current liability ?
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Answer

$1.$ Current Liability: A liability shall be classified as current if it satisfies any of the following criteria :
  • If it is expected to be settled in the company’s normal operating cycle.
  • If it is held primarily for the purpose being traded
  • If it is due to be settled withing twelve months after the reporting date.
$2.$ Non-current Liability: All other liabilities except current liabilities are classified as non-current liabilities.

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