QUESTION 4 Current and non-current liabilities are categorised as: when the liability is due for payment whether the liability is secured or unsecured to whom the liability is owed the size of the liability QUESTION 5 'A present obligation of the entity to transfer an economic resource as a result of past events' is a definition of: liabilities equity expenses income QUESTION 6 Which of these is not an income type item? royalties received accounts receivable fees received commission received QUESTION 7 The income statement is normally completed: before the balance sheet at the same time as the balance sheet after the balance sheet at any time, the order of completion for these two statements is irrelevant

4 

Current and non current liabilities are categorised as :-

Answer : - when the liability is due for payment

Explanation :-

Liabilities are categorised as current liabilities and non current liabilities on the basis of when the liability is due for payment .

Current liabilities are the liabilities that are due to be paid within one year . For example :- Accounts payable

Non current liabilities are the liabilities that are not due for payment within next one year . Non current liabilities are long term liabilities which are to be paid after one year . For Example :- Bonds payable

5 

Option (1) is the answer

Definition of liability:

Liability is defined as Present obligations of the entity, Arising from the past events, which is expected to be settled from outflows of entity's Resources.

A liability requires three things:

• Presents the business with an obligation
• The Obligation is a result of past events
• Settling the obligation will require an outflow of valuable resources

6 

Option B account receivable is not an income type item. Because account receivable is an asset account on the balance sheet that represents money due to a company in the short-term. It is recorded on the asset side of the balance sheet. All other items royalties received, fees received, commission received are the income type item which are recorded on the income side or credit side of the profit and loss account.

7 

Sequence of the Financial Statements makes a logical sense, hence we follow a certain order while preparing financial statements. We begin with enlisting items out of Journal entries to Trial Balance. We seperate the debits and credits to personal, nominal accounts via General Ledger. And we source and prepare Income Statement. Through Income statement we will figure out how much earnings have been retained in order to prepare next important statement ., i.e., Balance Sheet.

Hence the Answer is 3) After the balance sheet.