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BMG704 SAMPLE/PI RACTICE QUESTIONS. 1.1 Which of the following is a non-current asset? Factory premises owned by a business a. Rental expenses incurred by a sole trader business during financial year C. Accruals for wages d. Closing stock 1.2 Which of the following is a current liability? a. Insurance paid in advance of £50

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BMG704 SAMPLE/PI RACTICE QUESTIONS.
1.1 Which of the following is a non-current asset?
Factory premises owned by a business
a.
Rental expenses incurred by a sole trader business during
financial year
C. Accruals for wages
d. Closing stock
1.2 Which of the following is a current liability?
a. Insurance paid in advance of £50

BMG704 SAMPLE/PI RACTICE QUESTIONS. 1.1 Which of the following is a non-current asset? Factory premises owned by a business a. Rental expenses incurred by a sole trader business during financial year C. Accruals for wages d. Closing stock 1.2 Which of the following is a current liability? a. Insurance paid in advance of £50

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KelseyMaster · Tutor for 5 years

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1.1 a. Factory premises owned by a business<br />1.2 a. Insurance paid in advance of £50

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## Step 1: Understanding Non-Current Assets<br />Non-current assets, also known as long-term assets, are assets that are expected to provide economic benefits over a period of more than one year. These assets are not easily converted into cash and are used in the running of a business to generate income. Examples of non-current assets include land, buildings, machinery, and equipment.<br /><br />## Step 2: Identifying Non-Current Assets in the Options<br />Looking at the options given, 'Factory premises owned by a business' is a non-current asset. This is because a factory premises is a property that is expected to provide economic benefits for a period of more than one year. It is not easily converted into cash and is used in the running of a business to generate income.<br /><br />## Step 3: Understanding Current Liabilities<br />Current liabilities are short-term financial obligations that are typically due within one year. These include accounts payable, short-term loans, and accrued expenses.<br /><br />## Step 4: Identifying Current Liabilities in the Options<br />Looking at the options given, 'Insurance paid in advance of £50' is a current liability. This is because it is an obligation that is due within the next one year.
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