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 are common examples of current liabilities?

Mortgage payable (due in 20 years)

Accounts payable

Bonds payable (due in 10 years)

Goodwill

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Verified step by step guidance

Step 1: 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.

Step 2: Analyze each option provided in the problem. Determine whether the liability is expected to be settled within one year or the operating cycle.

Step 3: Evaluate 'Mortgage payable (due in 20 years)'. Since this liability is due in 20 years, it is classified as a long-term liability, not a current liability.

Step 4: Evaluate 'Accounts payable'. This is a common example of a current liability because it represents amounts owed to suppliers for goods or services purchased on credit, typically settled within one year.

Step 5: Evaluate 'Bonds payable (due in 10 years)' and 'Goodwill'. Bonds payable due in 10 years are long-term liabilities, and goodwill is an intangible asset, not a liability. Therefore, neither qualifies as a current liability.