Practice question · Sort into groups
Current or non-current? Classify each item.
Groups: Current asset · Non-current asset · Current liability · Non-current liability
- A patent
- A ten-year bond
- Trade payables due in 30 days
- Inventory
- Factory buildings
- Accounts receivable
Hints
- The dividing line is one year, and it applies to both sides.
- Ask whether the item cycles within the operating period.
Show the answer
Current asset: Inventory, Accounts receivable
Non-current asset: A patent, Factory buildings
Current liability: Trade payables due in 30 days
Non-current liability: A ten-year bond
Why
The one-year line divides both sides: above it, items cycle within the operating period; below it, commitments span multiple years.
Practise The Balance Sheet
The app has 6 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on The Balance Sheet
- A firm with negative net working capital is always insolvent.
- Match each balance-sheet ratio to what it measures.
- A supermarket chain runs with negative working capital year after year and is perfectly healthy. How?
- A company has current assets 80 and current liabilities 110. What does this tell us?
- Which items belong in the equity section of the balance sheet?
- Order balance-sheet items from most liquid to least liquid.