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JAMB Principles of Accounts 2009 Question 7

Question 7

Final Accounts of a Sole Trader

Use the information below:
I. Operating machine
II. Furniture
III. Fixtures and fittings
IV. Loan from friends
V. Creditors
What are the current liabilities?

  1. A.I and II
  2. B.IV and V
  3. C.III and V
  4. D.II and IV
Show the answer and explanation

Answer: B (IV and V)

Explanation

The loan from friends and the creditors are amounts the business owes; this question treats both as current liabilities.