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      Question

      Classify the following under the respective head in

      balance sheet: Items: I. Current maturities of long-term debt II.   Debentures III. Uncalled liability on shares IV. Deferred tax liability Head: A.   Non-Current Liabilities B.   Current Liabilities C.   Contingent Liabilities & commitments
      A I, II & IV: A; III: B Correct Answer Incorrect Answer
      B I & II: B; III & IV: A Correct Answer Incorrect Answer
      C I: B; II, III & IV: A Correct Answer Incorrect Answer
      D I & II: A; III: B; IV: C Correct Answer Incorrect Answer
      E I: B; II & IV: A; III: C Correct Answer Incorrect Answer

      Solution

      Current maturities of long term debt is a current liability as now the debt has been matured for repayment. Debentures are non-current liability, this is because debentures are long-term borrowing instruments with maturities usually extending beyond one year. Uncalled liability on shares is classified as Contingent Liabilities & commitments. Deferred tax liabilities are expected to be settled more than one year into the future, so they fall under the non-current liabilities category.

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