Which of the Following Statements About Current Liabilities Is True

question 13

Multiple Choice

Which of the following statements about current liabilities is true?

• A) Current liabilities are listed in order of decreasing amounts in the current liability section of the balance sheet.
• B) The amount of current liabilities has little implication for a company's liquidity.
• C) The current liability section never contains any portion of long-term liabilities.
• D) The current ratio is defined as current assets divided by current liabilities.

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Definitions:

Project Life Cycle

The series of phases that a project goes through from its initiation to its closure.

Variable Costs

Expenses that vary directly with the level of production or output, such as materials and labor costs.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and loan payments.

Never-ending Process

A continuous, unending cycle or series of activities, often related to improvement, innovation, or development within a business context.