A firm has an Operating Cycle of 15 months. A liability payable in 14 months will be classified as: MCQ with Answer and Explanation

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A firm has an Operating Cycle of 15 months. A liability payable in 14 months will be classified as:

A. Deferred Tax Liability

B. Non-Current Liability

C. Contingent Liability

D. Current Liability

Answer: Option D

Solution (By JKSSB Mock Tests)

According to Schedule III, a liability is current if it is due within 12 months OR within the entity's normal operating cycle (15 months here).

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