If the operating cycle is 16 months and the expected period of payment is 15 months, then in which category of the company's balance sheet it will go?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Current Liabilities.
If the payment period is less than the period of the operating cycle then it will be treated as a current. Here, payment is given means the company has to pay i.e it is a liability. So, the answer is current liability.