Which of the following statements concerning current liabilities is incorrect?

Question

Quizplus · Accepted Answer

Prepaid expenses are actually current assets, not current liabilities. Current liabilities are debts and obligations that a company owes and expects to pay within one year or its operating cycle, whichever is longer. Examples include accounts payable, short-term loans, and accrued expenses. Unearned revenues, on the other hand, represent payments received in advance for goods or services yet to be delivered and are recognized as a liability until earned. If a company has more current liabilities than current assets, it may indicate that it has difficulty fulfilling its short-term obligations and may have liquidity issues.

Which of the Following Statements Concerning Current Liabilities Is Incorrect