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متابعة

A loan due for repayment in 20 months time has been included as a current liability. What will be the effect when this is corrected?

<p><strong>a) increase net assets</strong></p> <p><strong>b) increase net current assets</strong></p> <p><strong>c) no effect on net current assets</strong></p> <p><strong>d) reduce net current assets</strong></p>

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تم إضافة السؤال من قبل VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.
تاريخ النشر: 2014/10/23
Saleem Khatri
من قبل Saleem Khatri , Head of Finance , Berger Paints International

Practically we all know Net Current Assets = Current Assets - Current Liabilities, based on this formula, the correction will decrease the current liabilities and thus increase the net current assets, so the correct answer should be "B".

 

But, Realistically, some long time back I have already come across a similar question, and replied "net current assets" as a correct answer but it was incorrect, some others use different formula for computing Net Current Assets which is Current Assets minus Total Liabilities, if you agree with this, then the correction will increase your long term liabilities and decrease your current liabilities, but your Net Current Assets will remain unchanged, in this case the correct answer will be "C"

Malik Khalid Mahmood
من قبل Malik Khalid Mahmood , Regional Finance Manager , Leosons International FZ LLC

Current liabilities will be decreased then Current Assets automatically will increased.

Ahmed kandil
من قبل Ahmed kandil , Cost Controller , Battour Holding Cpompany

answer is b 

Sara Khan
من قبل Sara Khan , financial and admin assistant , Ministry Of Defence

B

Abdallah Abu Zeyad CMA
من قبل Abdallah Abu Zeyad CMA , Finance Account Manager , Toyota - Abdul Latif Jameel Motors - KSA

b) increase net current assets, The Correct answer.

Mohammed Salim Allana
من قبل Mohammed Salim Allana , Compliance and Assurance Manager , United Arab Bank

B. Increase in Net current assets due to change/decrease in current liability

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