The bank loan is an example of a current liability.

Here's why:

1. A current liability is a financial obligation that is payable within one year. These are debts that must be paid off within a short period, typically within the fiscal year.

2. In this case, Luxury Landscapers has taken a short-term bank loan. This loan must be paid back within a specified short-term period, making it a current liability.

3. Accounts receivable refers to the outstanding invoices a company has or the money the company is owed from its clients. In this case, it doesn't apply because the scenario is talking about a debt, not an amount to be received.

4. Idle cash refers to cash that is not invested or used. It doesn't apply in this scenario because the cash has been used for the extension of the greenhouse.

5. A current asset is something of value that is expected to be converted into cash within one year. In this case, the bank loan is not an asset but a debt that needs to be paid off.

So, the correct answer is "a current liability".

Question

The bank loan is an example of a current liability.

Here's why:

1. A current liability is a financial obligation that is payable within one year. These are debts that must be paid off within a short period, typically within the fiscal year.

2. In this case, Luxury Landscapers has taken a short-term bank loan. This loan must be paid back within a specified short-term period, making it a current liability.

3. Accounts receivable refers to the outstanding invoices a company has or the money the company is owed from its clients. In this case, it doesn't apply because the scenario is talking about a debt, not an amount to be received.

4. Idle cash refers to cash that is not invested or used. It doesn't apply in this scenario because the cash has been used for the extension of the greenhouse.

5. A current asset is something of value that is expected to be converted into cash within one year. In this case, the bank loan is not an asset but a debt that needs to be paid off.

So, the correct answer is "a current liability".

Knowee AI · Accepted Answer

The bank loan is an example of a current liability.

Here's why:

1. A current liability is a financial obligation that is payable within one year. These are debts that must be paid off within a short period, typically within the fiscal year.

2. In this case, Luxury Landscapers has taken a short-term bank loan. This loan must be paid back within a specified short-term period, making it a current liability.

3. Accounts receivable refers to the outstanding invoices a company has or the money the company is owed from its clients. In this case, it doesn't apply because the scenario is talking about a debt, not an amount to be received.

4. Idle cash refers to cash that is not invested or used. It doesn't apply in this scenario because the cash has been used for the extension of the greenhouse.

5. A current asset is something of value that is expected to be converted into cash within one year. In this case, the bank loan is not an asset but a debt that needs to be paid off.

So, the correct answer is "a current liability".

Multiple Choice QuestionLuxury Landscapers currently has a short-term bank loan that was taken out to build an extension on the company's greenhouse. The bank loan is an example of _____.Multiple choice question.a current liabilityaccounts receivableidle casha current asset

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