Which of the following would appear on the balance sheet as a current liability?
A)A loss from an anticipated strike by employees
B)Potential damages from possible explosions in a fireworks factory
C)Premium offers in cereal boxes
D)The possible loss from a lawsuit

Question

Quizplus · Accepted Answer

Premium offers in cereal boxes represent a current liability since customers have already purchased the cereal and are entitled to receive the premium. The company must fulfill its obligation to provide the premium, which will require either the expenditure of cash or the provision of goods, within a short period of time. The other choices represent potential future events or uncertain losses, which do not meet the definition of a current liability.

Which of the Following Would Appear on the Balance Sheet