Question

Which of the following is excluded from Current assets?
O (A) Accrued income
(B) Advance tax
(C) Short-term borrowings
(D) Prepaid expenses

Answer 1

ANSWER :

★ (C) Short-term borrowings

• ❍ From the given items, Short-term borrowings is excluded from Current Assets. It is because, short-term borrowings is a Current Liability.

• ❍ Accrued Income, Advance Tax and Prepaid Expenses are the items of Current Assets. But Short-term Borrowings is an item of Current Liabilities.

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KNOW MORE :

✎ What is Current Asset ?

• ❒ Current Assets are the assets which are made or acquired and held for a short period of time, with a few to reselling them at a profit in the ordinary course of business. In other words, the assets that are meant for sale or which can be converted into cash within a short period of one year are called Current Assets.

• ❒ Current Assets are also known as "Floating Assets" or "Short-lived Assets" or "Active Assets".

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✎ What is Current Liability ?

• ❒ Current Liabilities are the liabilities which are expected to be paid by the business within a short period of time. The time period of paying the current liabilities should not be exceeded one year as of the date of the Balance Sheet of the business. Current Liabilities are required to be paid out of Current Assets.

• ❒ Current Liabilities are also known as "Short-term Liabilities".