O Level Accounting (7707)•7707/11/M/J/24

Explanation
Classifying loans as non-current liabilities Steps:
- Balance sheet date is 30 June 2021; non-current liabilities are due after 12 months (post-30 June 2022).
- Loan 1 ($5,000) due 1 December 2021: within 12 months, so current.
- Loan 2 ($10,000) due 1 September 2022: after 12 months, so non-current.
- Loan 3 ($8,000) due 1 December 2023: after 12 months, so non-current.
- Loan 4 ($6,000) due 1 December 2025: after 12 months, so non-current.
- Total non-current: 8,000 + 24,000.
Why D is correct:
- D totals $24,000, matching IAS 1's rule for non-current liabilities (obligations due more than 12 months from reporting date).
Why the others are wrong:
- A likely includes Loan 1 ($29,000), misclassifying it as non-current.
- B probably excludes Loan 2 ($14,000), treating it as current despite due date.
- C may exclude Loans 2 and 3 ($6,000), undercounting post-12-month obligations.
Final answer: D
Topic: Sole traders
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