If a partner makes a cash advance to a partnership to be repaid in five years time and does not wish it to be included as a capital contribution, how will it be classified in the balance sheet?
A) Current liability
B) Non-current asset
C) Non-current liability
D) Current asset

Question

Quizplus · Accepted Answer

Since the cash advance is to be repaid in five years time, it is classified as a non-current liability in the balance sheet.

If a Partner Makes a Cash Advance to a Partnership