NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Evaluating the Financial Position of Clients
Which of the following is treated as a long-term liability in a client's personal balance sheet?
The home loan outstanding principal beyond the next year is a long-term liability because it is repayable over many years. Credit card dues, utility bills and premiums falling due soon are current liabilities.
- AHome loan outstanding principal beyond the next yearCorrect
- BCredit card dues payable this month
- CUtility bills due next week
- DInsurance premium due this quarter
Explanation
Long-term liabilities are obligations due beyond one year, such as the outstanding principal of a home loan. Credit card dues, utility bills and near-term premiums are current liabilities payable within a short time.
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