Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

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Multiple Choice

Which of the following financial obligations is best satisfied with current debt?

Mortgage payable

Accounts payable

Deferred tax liability

Bonds payable

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Verified step by step guidance

Understand the concept of current debt: Current debt refers to financial obligations that are due within one year. These are typically short-term liabilities that a company expects to settle using its current assets.

Analyze each option provided: Mortgage payable, accounts payable, deferred tax liability, and bonds payable. Determine whether each obligation is classified as a current liability or a long-term liability.

Evaluate 'Mortgage payable': Mortgages are typically long-term liabilities, as they are paid off over several years. However, the portion of the mortgage due within the next year may be classified as a current liability.

Evaluate 'Accounts payable': Accounts payable represents short-term obligations to suppliers for goods or services purchased on credit. These are typically due within a short period, making them a current liability.

Evaluate 'Deferred tax liability' and 'Bonds payable': Deferred tax liability is a long-term obligation arising from temporary differences between accounting and tax reporting. Bonds payable are also long-term liabilities, as they are typically repaid over several years. Neither is best satisfied with current debt.