Question

Assertion (A): Non-current Liabilities are the liabilities which are not Current Liabilities.

Reason (R): Liabilities are of two types, i.e., Non-current Liabilities and Current Liabilities. Liabilities which are payable after 12 months or after the period of Operating Cycle from the date of Balance Sheet are shown as Non-current Liabilities.

In the context of the above two statements, which of the following is correct?

पर्याय

• Assertion (A) is correct but Reason (R) is wrong.

• Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are incorrect.

• Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).

Answer 1

Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).

Explanation:

According to Schedule III of the Companies Act, 2013, corporate liabilities are broadly split into two types: current and non-current. Statement A is correct because non-current liabilities are officially defined as obligations that do not meet the criteria of a current liability. Statement R is also correct and perfectly explains Statement A by clarifying that any liability payable after 12 months or beyond the operating cycle is classified as a non-current liability.