BUSINESS - 5.4 STATEMENT OF FINANCIAL POSITION

Balance Sheet Practice Questions

  • Focuses on classifying assets and liabilities on a balance sheet
  • Includes scenarios involving current and non-current classifications
  • Challenges understanding of financial statement components
  • Designed for Grade 9 students with advanced difficulty

Here are the first 3 questions. Click “View all questions” to see the complete assessment.

Q1.

A printing business owns an office printer expected to be used for four years and paper bought for resale. It also owes a packaging supplier, payable in 30 days, and has a bank loan repayable in four years. Which option correctly classifies all four items?

  1. A) Office printer: current asset; paper: non-current asset; supplier amount: non-current liability; bank loan: current liability
  2. B) Office printer: non-current asset; paper: current asset; supplier amount: current liability; bank loan: non-current liability
  3. C) Office printer: current asset; paper: current asset; supplier amount: current liability; bank loan: non-current liability
  4. D) Office printer: non-current asset; paper: current asset; supplier amount: non-current liability; bank loan: current liability

Q2.

At the balance sheet date, a hotel has paid insurance covering the next six months. It has also received a deposit for a conference that will take place in two months. How should these items be classified?

  1. A) The prepaid insurance is a current asset, and the customer deposit is a current liability
  2. B) Both are current assets
  3. C) The prepaid insurance is a non-current asset, and the customer deposit is a current asset
  4. D) The prepaid insurance is a current liability, and the customer deposit is a non-current liability

Q3.

A business has a bank loan of $80,000. Under the repayment agreement, $20,000 must be repaid during the next accounting year and the remaining $60,000 is due three years later. How should the loan be shown on the balance sheet?

  1. A) $80,000 as a current liability
  2. B) $20,000 as a non-current liability and $60,000 as a current liability
  3. C) $80,000 as a non-current liability
  4. D) $20,000 as a current liability and $60,000 as a non-current liability

Q4.

A florist owns a delivery motorcycle, cut flowers ready for sale, cash in the bank and shop fittings. Which pair should both be classified as current assets?

  1. A) Cut flowers and cash in the bank
  2. B) Delivery motorcycle and cut flowers
  3. C) Delivery motorcycle and shop fittings
  4. D) Cash in the bank and shop fittings

Q5.

A vehicle repair business buys a diagnostic machine for use over five years. Payment to the supplier is due in 90 days. It also buys spare parts to use in customer repairs. Which classification is correct?

  1. A) Diagnostic machine: non-current asset; supplier amount: current liability; spare parts: current asset
  2. B) Diagnostic machine: non-current asset; supplier amount: non-current liability; spare parts: current liability
  3. C) Diagnostic machine: current asset; supplier amount: current liability; spare parts: non-current asset
  4. D) Diagnostic machine: current asset; supplier amount: non-current liability; spare parts: non-current asset

Q6.

A business replaces its bank overdraft with a new loan that is repayable in five years. Which change in classification should occur?

  1. A) Current assets decrease, and non-current assets increase
  2. B) Current assets increase, and current liabilities increase
  3. C) Current liabilities increase, and non-current liabilities decrease
  4. D) Current liabilities decrease, and non-current liabilities increase

Q7.

A property company owns one house that it uses as its administrative office and three houses purchased for resale to customers. How should these properties be classified?

  1. A) All four houses are current assets because the business sells property
  2. B) The office house is a current asset, and the three houses for resale are non-current assets
  3. C) The office house is a non-current asset, and the three houses for resale are current assets
  4. D) All four houses are non-current assets because they are buildings

Q8.

At its year end, a manufacturer owes wages payable next week, tax payable in four months, a mortgage due in ten years and a supplier invoice due in 18 months. Which option places the liabilities in the correct groups?

  1. A) Current liabilities: tax and mortgage; non-current liabilities: wages and supplier invoice
  2. B) Current liabilities: wages and supplier invoice; non-current liabilities: tax and mortgage
  3. C) Current liabilities: wages and tax; non-current liabilities: mortgage and supplier invoice
  4. D) Current liabilities: mortgage and supplier invoice; non-current liabilities: wages and tax

Q9.

Study the labelled items in the figure. Which option correctly classifies items B and D?

  1. A) B is a non-current asset, and D is a non-current liability
  2. B) B is a current liability, and D is a current asset
  3. C) B is a non-current asset, and D is a current liability
  4. D) B is a current asset, and D is a current liability

Q10.

The figure shows the repayment schedule for loan R at the balance sheet date. How should loan R be classified?

  1. A) $6,000 as a current liability and $24,000 as a non-current liability
  2. B) $6,000 as a non-current liability and $24,000 as a current liability
  3. C) $30,000 as a current liability
  4. D) $30,000 as a non-current liability

What this assessment covers

Concepts tested

  • Classification of current and non-current assets
  • Classification of current and non-current liabilities
  • Understanding of balance sheet structure
  • Asset and liability management
  • Financial statement interpretation

Question Mix

  • Hard questions included

Skills you build

  • Classifying financial items accurately
  • Analyzing balance sheet scenarios
  • Interpreting financial data
  • Applying accounting principles
  • Evaluating financial positions

Related assessments

More practice

Other assessments in this subject