A Current Liability Is a Debt That Can Reasonably Be

question 211

Multiple Choice

A current liability is a debt that can reasonably be expected to be paid

• A) within one year or the operating cycle whichever is longer.
• B) between 6 months and 18 months.
• C) out of currently recognized revenues.
• D) out of cash currently on hand.

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Definitions:

Journal Entries

The recordings of financial transactions in an accounting system which form the basis of building financial statements.

Semiannual Interest Payments

Semiannual interest payments refer to the practice of paying interest on a loan or bond twice a year.

Bonds

Fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental, entitling the holder to interest payments and the return of principal at maturity.

Par Value

The nominal value of a bond or stock as declared by the issuer, which might not correspond with its actual market price.