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Business Studies

Fixed Assets and Current Assets

How short ter...

Question

How short term and long term loans are asset for company

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Solution

Dear student short term and long term loans are liabilities as they have to be paid off but short and long term advances are assets as they are recoverable. Loans can't be termed as assets but they can be used to procure assets. Regards

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Q. From the following information, calculate Total Assets to Debt Ratio:

	₹			₹
Fixed Assets (Gross)	6,00,000		Accumulated Depreciation	1,00,000
Non-current Investments	10,000		Long-term Loans and Advances	40,000
Current Assets	2,50,000		Current Liabilities	2,00,000
Long-term Borrowings	3,00,000		Long-term Provisions	1,00,000

Q. If a bank is unable to refund the short term deposits as funds are locked in long term loans, it involves which of the following?

____________ of total assets to debt ratio indicates that assets have been mainly financed by owners funds and the long-term loans are adequately covered by assets.

Q. Under which major sub-headings the following items will be placed in the Balance Sheet of a company as per revised Schedule VI, Part-I of the Companies Act, 1956:
(i) Accrued Incomes
(ii) Loose Tools
(iii) Provision for employees benefits
(iv) Unpaid dividend
(v) Short-term loans
(vi) Long-term loans.

Q. Distinguish between
Call Loans and Long Term Loans.

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