A sole trader is preparing the Statement of Financial Position at the end of the financial period. Match each accounting item on the left with its correct Balance Sheet classification heading on the right.
- Prepaid advertising expense for the upcoming quarterCurrent Asset
- Trade marks and registered brand namesNon-current Asset
- Three-year bank loan for capital expansionNon-current Liability
- Accrued electricity utility charges owing at year-endCurrent Liability
Cevap
Prepaid advertising expense matches Current Asset; Trade marks match Non-current Asset; Three-year bank loan matches Non-current Liability; Accrued electricity utility charges match Current Liability.
Each item is categorized according to its liquidity and settlement timeframe: prepaid expenses yield short-term benefit (Current Asset), trade marks provide long-term operations support (Non-current Asset), multi-year loans are settled past one year (Non-current Liability), and accrued bills are obligations payable immediately or within one year (Current Liability).
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Anahtar Kavram
Classification of balance sheet items into Non-current Assets, Current Assets, Non-current Liabilities, and Current Liabilities based on duration and nature.