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      Question

      Which of the following is a non-current liability?

      A Accounts Payable Correct Answer Incorrect Answer
      B Short-term loan Correct Answer Incorrect Answer
      C Provision for taxes Correct Answer Incorrect Answer
      D Debentures repayable after 5 years Correct Answer Incorrect Answer
      E Bills payable Correct Answer Incorrect Answer

      Solution

      UnderĀ Schedule IIIĀ of theĀ Companies Act, 2013, liabilities are classified asĀ Non-CurrentĀ if they do not meet the criteria for a current liability. A liability is "non-current" if it is expected to be settledĀ beyond 12 monthsĀ from the reporting date or beyond the duration of the normalĀ operating cycle. Since the debentures mentioned are repayable after 5 years, they represent a long-term obligation of the company.Ā 

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