Assertion: As per Schedule III to the Companies Act, 2013, an asset is categorised under Current assets if it is held primarily for trading.
Reasoning: Assets other than current are categorised as Fixed Assets as per Schedule III to the Companies Act, 2013.
Answer & explanation
Correct answer: option 3
An item is classified as current:
if it is involved in entity’s operating cycle
is expected to be realised/settled within twelve month
if it is held primarily for trading
is cash and cash equivalent or
if entity does not have on unconditional rights to defer settlement of liability for atleast 12 months after the reporting period.
Other assets and liabilities are non-current.