Practice question · Sort into groups
Current liability, non-current liability, or equity?
Groups: Current liability · Non-current liability · Equity
- Trade payables due in 30 days
- Retained earnings
- A pension obligation
- Share premium
- Wages accrued but not yet paid
- A ten-year corporate bond
Hints
- The dividing line for obligations is one year.
- The owners' residual belongs to neither obligation bucket.
Show the answer
Current liability: Trade payables due in 30 days, Wages accrued but not yet paid
Non-current liability: A ten-year corporate bond, A pension obligation
Equity: Retained earnings, Share premium
Why
Current = due within a year. Non-current = beyond a year. Equity = the owners' residual. The three buckets exhaust the right side of the equation.
Practise Liabilities and Equity
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