An entity presents the following items in its trial balance. Classify the items as current or non-current assets in accordance with Accounting…
CA Intermediate · Advanced Accounting · MTP · September 2025
An entity presents the following items in its trial balance. Classify the items as current or non-current assets in accordance with Accounting Standard 1 (AS 1) and, where AS 1 is silent, refer to Schedule III of the Companies Act, 2013: Item Description Classification (Current / Non-Current) Security deposits paid to electricity company Raw materials inventory Prepaid rent (for 14 months) Fixed deposits with 18-month maturity
Suggested Answer and Working Notes:
Item Description Classification Security deposits paid to electricity company Non-current asset Raw materials inventory Current asset Prepaid rent (for 14 months) Current asset (if not material beyond 12 months) Fixed deposits with 18-month maturity Non-current asset
Topics: AS 1, Applicability of AS
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