What Is the Key Distinction Between Current and Non-Current Liabilities

question 28

Multiple Choice

What is the key distinction between current and non-current liabilities?

• A)Current liabilities always have lower balances than non-current liabilities.
• B)Non-current liabilities always increase over time.
• C)Non-current liabilities are permanent debts of the business.
• D)Current liabilities will be paid off within one year or one operating cycle.

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Definitions:

U.S. Government Securities

Financial instruments issued by the U.S. Department of the Treasury or other federal government agencies to finance federal spending, including Treasury bonds, notes, and bills.

Bank Reserves

The amounts of funds that a bank holds in its reserve account with the central bank or as cash in vault, to meet any sudden withdrawals.

Market Rate

The prevailing price or interest rate at which goods, services, or securities are bought and sold in a competitive marketplace.

Independence

Independence is the condition of a nation, country, or state which exercises self-governance, and sovereignty, over its territory.