Which of the following is an example of a non-current liability?

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Multiple Choice

Which of the following is an example of a non-current liability?

Explanation:
Non-current liabilities are obligations that won’t be settled within the next year. A mortgage or long-term loan fits this, because the main principal repayments extend over many years. The portion of the debt that isn’t due within the next 12 months is classified as non-current; only the short-term portion would appear as a current liability. By contrast, paying creditors (like accounts payable) and a bank overdraft are typically due in the near term, so they’re current liabilities. Personal expenses aren’t liabilities of the business on the balance sheet; they’re costs incurred by individuals.

Non-current liabilities are obligations that won’t be settled within the next year. A mortgage or long-term loan fits this, because the main principal repayments extend over many years. The portion of the debt that isn’t due within the next 12 months is classified as non-current; only the short-term portion would appear as a current liability. By contrast, paying creditors (like accounts payable) and a bank overdraft are typically due in the near term, so they’re current liabilities. Personal expenses aren’t liabilities of the business on the balance sheet; they’re costs incurred by individuals.

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