Could someone give me a hand with this question? How would the mark allocation work? (It's not a VCAA question tho)
I am also not sure how to begin answering this. A sample response/ key points would be greatly appreciated. Thanks!
Hi destinychild,
For starter this is a really good question.
Points-
- I would recommend you to start every theory question in Accounting with definition. In this case define Loan. While defining you should try to talk about why loan is a liability. So talk about how it is an obligation which is to be paid. This should give you a mark or two.
- You should also talk about how in this case loan is an liability but talk about how it is current and non current. This is as loan would not be able to be paid in 12 months so some of it would have to be paid in more than 12 months (non current liability). This again would be worth a mark.
I hope this helps you