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

When creating a personal balance sheet, which of the following is considered a current liability?

Credit card balance due within 30 days

Student loan payable over 10 years

Car loan with 5 years remaining

30-year mortgage payable

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Verified step by step guidance

Understand the concept of a current liability: A current liability is a financial obligation that is expected to be settled within one year or the operating cycle, whichever is longer. Examples include accounts payable, short-term loans, and credit card balances due within a short period.

Analyze the options provided in the problem: Each option represents a type of liability, and you need to determine which one qualifies as a current liability based on the definition.

Option 1: Credit card balance due within 30 days. Since this obligation is due within a short period (30 days), it meets the criteria for a current liability.

Option 2: Student loan payable over 10 years. This is a long-term liability because the repayment period exceeds one year.

Option 3: Car loan with 5 years remaining and Option 4: 30-year mortgage payable. Both of these are long-term liabilities as their repayment periods are significantly longer than one year.