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 is reported as a current liability?

Mortgage payable (due in 15 years)

Deferred tax liability (long-term)

Bonds payable (due in 10 years)

Accounts payable

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Verified step by step guidance

Understand the definition of a current liability: A current liability is an obligation that is expected to be settled within one year or the operating cycle, whichever is longer.

Analyze each option provided in the problem: Mortgage payable (due in 15 years), Deferred tax liability (long-term), Bonds payable (due in 10 years), and Accounts payable.

Determine the time frame for each liability: Mortgage payable, deferred tax liability, and bonds payable are all long-term obligations because they are due beyond one year. Accounts payable, however, is typically due within a short period (e.g., 30 to 90 days), making it a current liability.

Confirm that accounts payable meets the criteria for current liabilities: Accounts payable represents amounts owed to suppliers for goods or services purchased on credit, and these are usually settled within the operating cycle or one year.

Conclude that the correct answer is accounts payable, as it is the only option that qualifies as a current liability based on the definition and time frame.