For which of the following reasons would a user examine the current liabilities?
A)To determine how quickly accounts receivable are collected.
B)To determine how much cash will be required to meet obligations in the short-term.
C)To determine how much cash will be required to meet obligations in the long-term.
D)To evaluate company performance.

Question

Quizplus · Accepted Answer

Current liabilities represent the obligations that a company must fulfill within a year or less. Examining the current liabilities helps a user to determine how much cash will be required to meet these obligations in the short-term. This analysis is important for cash management and financial planning purposes.

For Which of the Following Reasons Would a User Examine