Current Liabilities Are Obligations of a Company That It Expects

question 18

Multiple Choice

Current liabilities are obligations of a company that it expects to liquidate within

• A) one year.
• B) the normal operating cycle.
• C) the normal operating cycle or one year, whichever is longer.
• D) the normal operating cycle or one year, whichever is shorter.

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Definitions:

Market Value

The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller.

Par Value

The face value of a bond or stock as stated on the certificate or charter, often used for legal capital or accounting purposes.

Cash

A form of currency that includes coins and paper notes, which is used as a medium of exchange for goods and services.

Shares

Units of ownership interest in a corporation or financial asset, which provide for an equal distribution in any profits, if any are declared, in the form of dividends.