A current liability is defined as:
A)An amount borrowed less than one year ago.
B)An amount due to an employee.
C)An amount due within one year.

Question

Quizplus · Accepted Answer

A current liability is an obligation that is expected to be settled within one year or the operating cycle of the company, whichever is longer. Therefore, option C is the correct choice. Option A refers to a specific type of liability called short-term borrowing, which may or may not be a current liability depending on the repayment terms. Option B refers to a liability owed to an employee, which may be a current liability if it is due to be paid within a year, or a long-term liability if it is expected to be paid over a longer period of time.

A Current Liability Is Defined As