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 most like a short-term collateralized loan?

Bank overdraft

Accrued expenses

Notes payable secured by inventory

Accounts payable

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Verified step by step guidance

Understand the concept of a short-term collateralized loan: This type of loan is typically secured by an asset, such as inventory, accounts receivable, or other short-term assets, and is expected to be repaid within a short period, usually less than a year.

Analyze the options provided: Bank overdraft, accrued expenses, notes payable secured by inventory, and accounts payable. Determine which of these involves collateral and is short-term in nature.

Review the characteristics of each option: Bank overdraft is a short-term borrowing facility but does not involve collateral. Accrued expenses are liabilities incurred but not yet paid, and they do not involve borrowing or collateral. Accounts payable are amounts owed to suppliers and do not involve collateral.

Focus on 'Notes payable secured by inventory': This option explicitly mentions that the loan is secured by inventory, which is a form of collateral. Additionally, notes payable are typically short-term obligations.

Conclude that 'Notes payable secured by inventory' is most like a short-term collateralized loan because it meets both criteria: it is short-term and involves collateral (inventory).