Read the information carefully and answer the questions.
| Particulars | Amount (₹) |
| Inventories | 50,000 |
| Trade Receivables | 50,000 |
| Advance Tax | 4,000 |
| Cash and Cash Equivalents | 30,000 |
| Trade Payables | 1,00,000 |
| Bank overdraft | 4,000 |
Amount of Total current liabilities are:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 1,04,000
Current liabilities are the amounts the firm must pay within its operating cycle. A bank overdraft is a short-term borrowing, repayable on demand, so it is a current liability just like trade payables.
Current liabilities in the given data:
Trade Payables = Rs. 1,00,000
Bank Overdraft = Rs. 4,000
Total Current Liabilities = Rs. 1,04,000
Leaving out the overdraft gives only Rs. 1,00,000, which understates what the firm owes in the short run.
NCERT (2026-27 edition):
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