10 Questions
What is the primary purpose of holding a liability that is considered as held for trading?
For selling or repurchasing in the near term
What is the normal operating cycle of an entity that has an account payable due to be paid in 15 months?
18 months
Which of the following is NOT a criterion for a liability to be considered as held for trading?
It is a long-term investment
What is the classification of a financial liability at FVTPL that is irrevocably designated as such on initial recognition?
Non-current
Which of the following is an example of a liability that is usually classified as current?
Derivative liability
What is the purpose of classifying liabilities as current or non-current in the statement of financial position?
To distinguish between short-term and long-term debts
When is a liability classified as current?
If all of the above criteria are met
What is the normal operating cycle of an entity?
The time between the acquisition of assets and their realization in cash or cash equivalents
Which of the following liabilities is classified as current even if it will be settled beyond 12 months after the reporting date?
Notes payable for operating purposes
What is the criterion for classifying a liability as non-current?
If none of the above criteria are met
Test your knowledge of financial reporting of liabilities, including classification, criteria, and residual meaning. Learn about current and non-current liabilities, normal operating cycle, and settlement within 12 months.
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