A delivery company is creating a balance sheet. Which of the following would most likely be considered a short-term liability on this balance sheet?

Question

Quizplus · Accepted Answer

Revenue received for the delivery of items that have not yet been delivered is considered a short-term liability because the company has an obligation to deliver the items and may need to provide a refund or credit if the items are not delivered or are delivered late. Prepaid rent, depreciation, and a loan to be paid back in two years would be considered long-term liabilities.

A Delivery Company Is Creating a Balance Sheet