If the current liabilities now shown on a firm's balance sheet are not paid within one year then they will be:
A)Transferred to long-term liabilities
B)Deducted as bad debt
C)Listed as current liabilities one year from now
D)Deducted from retained earnings

Question

Quizplus · Accepted Answer

Current liabilities are debts that must be paid within one year. If they are not paid within a year, they will still be classified as current liabilities on the balance sheet until they are paid. They will not be transferred to long-term liabilities or deducted as bad debt. Retained earnings are not affected by current liabilities.

If the Current Liabilities Now Shown on a Firm's Balance