Question: Which of the following is an example of a current liability?
Options:
Long-term debt
Accounts Receivable
Accounts Payable
Property, Plant, and Equipment
Correct Answer: Accounts Payable
Solution:
Accounts Payable is a current liability as it represents obligations due within one year.
Which of the following is an example of a current liability?
Practice Questions
Q1
Which of the following is an example of a current liability?
Long-term debt
Accounts Receivable
Accounts Payable
Property, Plant, and Equipment
Questions & Step-by-Step Solutions
Which of the following is an example of a current liability?
Step 1: Understand what a current liability is. A current liability is a financial obligation that a company needs to pay within one year.
Step 2: Look at the options provided in the question. Identify which option represents an obligation that is due within one year.
Step 3: Recognize that Accounts Payable is money that a company owes to its suppliers for goods or services received, which must be paid within a short period, usually within a year.
Step 4: Conclude that since Accounts Payable is due within one year, it is indeed a current liability.
No concepts available.
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