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 items would be considered a current liability?

Mortgage Payable (due in 10 years)

Common Stock

Bonds Payable (maturing in 5 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 a company expects to settle within one year or the operating cycle, whichever is longer.

Analyze each option provided in the problem: Mortgage Payable (due in 10 years), Common Stock, Bonds Payable (maturing in 5 years), and Accounts Payable.

Determine why Mortgage Payable is not a current liability: Since it is due in 10 years, it is classified as a long-term liability.

Evaluate why Common Stock is not a liability: Common Stock represents ownership in the company and is part of equity, not a liability.

Identify why Accounts Payable is a current liability: Accounts Payable represents amounts owed to suppliers for goods or services received, typically due within a short period (e.g., 30-90 days), making it a current liability.