Which of the Following Statements About Current Liabilities Is True

question 128

Multiple Choice

Which of the following statements about current liabilities is true?

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

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Definitions:

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another party, if the latter has relied on that promise to their detriment.

Parol Evidence Rule

A legal rule that excludes the admission of oral statements, written agreements outside the contract, or preliminary agreements in interpreting a written contract.

Parol Evidence Rule

The parol evidence rule is a legal principle that prevents parties in a written contract from presenting external evidence that contradicts or adds to the written terms of the contract.

Statute Of Frauds

A legal concept that requires certain types of contracts to be written and signed in order to be legally enforceable.