Which of the following is true about a firm's current liabilities?
A) They must equal its current assets.
B) They do not have to be repaid on any specific date. Instead, repayment can be deferred as long as the firm is willing and able to make the required interest payments.
C) They are what it owes to its shareholders.
D) They are due in less than a year.

Question

Quizplus · Accepted Answer

Current liabilities are the debts and obligations that a company owes and are due for payment within one year or less. Therefore, option D is the correct answer. Option A is incorrect because current liabilities do not necessarily have to equal current assets. Option B is incorrect because while some current liabilities may allow deferral of repayment with interest payments, not all current liabilities have this option. Option C is incorrect because current liabilities refer to what a company owes to its creditors, not shareholders.

Which of the Following Is True About a Firm's Current