Is there an error in Liabilities Example in "Balance Sheet Basics - Liabilities & Net Worth" video ?



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Hello,
Thank you for creating this wonderful training course. I have just viewed the video "Balance Sheet Basics - Liabilities & Net Worth". I think there is an error in the example of Current Liability which is mentioned from approx 1:20 in the video.

Binny says that the company has a loan of Rs 25 lakh, of which only Rs 1 lakh is due right now. He proceeds to list Rs 1 lakh as current liability and Rs 25 lakh as Non-Current Liability. He further ADDS both these numbers into Total Liabilities.

I think the following errors are happening:
1. Rs 1 lakh is not a current liability. It is simply part of the larger loan and need not be separately listed. A current liability is something like a Overdraft Account in a bank.

2. When the Total Liability gets calculated, the Rs 1 lakh gets double-counted, because according Binny's prior description, it's already part of the Rs 25 lakh loan.

Please do take a look at the example and confirm if my understanding is correct ?

Thanks.

Dhiren.

dhirenshah3@yahoo.com
9884798890

1 Answer(s)


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Hi Dhiren, Yes you are right. That is an error. Thanks for pointing it out. We will fix it.

Thanks for your kind words about the course.