Accountancy Part BFinancial Statements of a Company

Fixed deposit for the term of five years will come under which of the…

Fixed deposit for the term of five years will come under which of the following?

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → Non Current Investment

A five-year fixed deposit will not be realised within twelve months, so it is an investment of the non-current kind.

NCERT (2026-27 edition):
Non-current Investments – “Investments are also classified into current and non-current categories. Investments expected to realise within twelve months are considered as current investments under current assets. Others are classified as non-current investments under non-current assets. Both are however shown on the face of the balance sheet.”