Current Liabilities

question 36

Multiple Choice

Current Liabilities

• A)Are listed in order of liquidity.
• B)Are due to be settled after one year or the operating cycle.
• C)Are due to be settled within the shorter of one year or the operating cycle.
• D)Are closed at the end of the accounting period to current assets.
• E)Are listed in the order in which they are to be paid, with the first one listed to be paid first.

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Definitions:

Net Loss

The negative financial result that occurs when a company's expenses exceed its revenues.

Merchandise Inventories

Goods purchased and held for resale by a business, including products available for sale and items in the process of production for sale.

Direct Method

A way of preparing the cash flow statement where actual cash flow information from the company's operating activities is used, as opposed to the indirect method.

Accounts Payable

Short-term liabilities owed to suppliers or creditors for goods and services received but not yet paid for.