According to the Revised Schedule III, which of the following is a current liability?a.Long-term debtb.Accumulated depreciationc.Accounts payabled.Retained earningsClear my choice
Question
According to the Revised Schedule III, which of the following is a current liability?a.Long-term debtb.Accumulated depreciationc.Accounts payabled.Retained earningsClear my choice
Solution
The correct answer is c. Accounts payable.
Here's why:
a. Long-term debt: This is not a current liability. It refers to loans and other types of obligations that are due in any period longer than one year.
b. Accumulated depreciation: This is not a liability at all. It is a contra asset account that reduces the value of the assets to which it is applied.
c. Accounts payable: This is a current liability. It represents the money a company owes to its suppliers for goods and services purchased on credit and is expected to be paid off within a year.
d. Retained earnings: This is not a liability. It is a part of shareholders' equity and represents the portion of net earnings which is retained in the company rather than paid out as dividends.
Similar Questions
Which one of the following accounts is a current liability?Group of answer choicesA. ReservesB. Prepaid expenseC. Trade receivablesD. Trade payables
In a pro forma balance sheet, what would be considered a non-current liability? A. Long-term loans B. Accounts payable C. Salaries payable D. Rent expense
Which of the following is reported in a Balance Sheet as a liability? a. Contingent liability b. Accumulated depreciation c. Revenue received in advance d. Accrued revenue
Which of the following is an example of a liability?Accumulated depreciationRevenue received in advanceAllowance for doubtful debtsPrepayments
A current liability is a debt that can reasonably be expected to be paid Group of answer choicesout of cash currently on hand.out of currently recognized revenues.between 6 months and 18 months.within one year.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.