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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Debts listed as current liabilities are those that:

are expected to be settled within one year or the operating cycle, whichever is longer

are always secured by company assets

do not require payment in cash

are not expected to be paid for at least five years

Previous problemNext problem

Verified step by step guidance

Understand the definition of current liabilities: Current liabilities are obligations that a company expects to settle within one year or the operating cycle, whichever is longer.

Analyze the options provided in the problem: Evaluate each option to determine which aligns with the definition of current liabilities.

Option 1: 'Are expected to be settled within one year or the operating cycle, whichever is longer' matches the definition of current liabilities. This is the correct answer.

Option 2: 'Are always secured by company assets' is incorrect because current liabilities do not necessarily need to be secured by assets.

Option 3 and Option 4: 'Do not require payment in cash' and 'Are not expected to be paid for at least five years' are incorrect because they contradict the definition of current liabilities, which are short-term obligations typically settled in cash within the specified time frame.