CA5106: CONCEPTUAL FRAMEWORK AND ACCOUNTING STANDARDS

PREPARING THE FINANCIAL STATEMENTS

EXERCISE 1: CURRENT OR NON-CURRENT CLASSIFICATION OF ASSETS AND

LIABILITIES

Required: Classify each item of asset or liability as either current or non-current. Assume
that the end of the reporting period is December 31, 2019.

Answers will be provided later this week.

Financial Statement Account Answer

1 Cash in bank (unrestricted as to use)
2 Income tax payable
3 Unearned service revenue (service to be rendered
within 12 months from the end of the reporting period)
4 Accounts receivable
5 Salaries payable
6 Prepaid rent (for a one-year period beginning March
1, 2020)
7 Building
8 Bonds payable (lump-sum payment due on
December 31, 2027)
9 Investment in debt securities at fair value through
profit or loss
10 Copyright
11 Raw materials inventory
12 Transportation equipment
13 Notes payable (installment payment due every
December 31 of each year, next installment payment
is due December 31, 2020, last installment payment
due December 31, 2025)
14 Work in process inventory
15 Patents
16 Petty cash fund
17 Trademarks
18 Investment property
19 Non-current asset held for sale (e.g. building
previously classified as property, plant and
equipment expected to be sold within 12 months)
20 Accounts payable
21 Interest payable
22 Mortgage payable
23 Bond sinking fund (cash set aside for the retirement
of bonds payable due 2025)
24 Compensating balance of a savings account
(restricted as to withdrawal)
25 Bank overdrafts
26 Cash dividends payable
27 Investment in equity securities at fair value through
other comprehensive income
28 Notes payable (issued for the purchase of goods,
payable within 15 months from end of the reporting
period)
29 Notes payable (issued for borrowing money from the
bank, payable within 15 months from the end of the
reporting period)
30 Finished goods inventory

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