Which of the following is a characteristic of a current liability?
A) A current liability is a liability that is due within 30 days.
B) A current liability is a liability that is due within one year or one operating cycle, whichever is longer.
C) A current liability is a liability that is due within 10 days.
D) A current liability is a liability that is due in longer than a one-year period, or one operating cycle.

Question

Quizplus · Accepted Answer

A current liability is generally defined as a debt that is expected to be paid within one year or the normal operating cycle of a business, whichever is longer. This includes obligations such as accounts payable, salaries and wages payable, and short-term loans. Option A is too narrow and restricts the definition of current liabilities to only those due within 30 days. Option C is too narrow and limits current liabilities to only those due within 10 days. Option D is incorrect because current liabilities are by definition due within a year or one operating cycle, whichever is longer.

Which of the Following Is a Characteristic of a Current