Question

Match the following items:

• A. Current Liability
• B. Current Assets
• C. Non-cash item
• D. Non-operating

Answer 1

1. Inventory which represents raw materials, components, and finished products is included as current assets as they are expected to be converted to cash within one year of the date appearing in the heading of the company's balance sheet.
2. Non-operating expenses, like its name implies, is an accounting term used to describe expenses that occur outside of a company's day-to-day activities. These types of expenses include monthly charges like interest payments on debt, but can also include one-off or unusual costs. So, finace cost is a non-operating activity
3. Trade payables are nearly always classified as current liabilities since they are usually payable within one year.
4. A non-cash expense is an expense that is reported on the income statement of the current accounting period, but there was no related cash payment during the period. A typical example of a non-cash expense is depreciation.