A Delivery Company Is Creating a Balance Sheet

question 15

Multiple Choice

A delivery company is creating a balance sheet.Which of the following would most likely be considered a short-term liability on this balance sheet?

• A)the depreciation over the last year in the value of the vehicles owned by the company
• B)revenue received for the delivery of items that have not yet been delivered
• C)a loan which must paid back in two years' time
• D)prepaid rent on the offices occupied by the company

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Definitions:

Student Loans

Financial loans provided to students to help cover the cost of higher education, which typically must be repaid after graduation.

Unsecured Creditors

Creditors who have no specific claim over the assets of a debtor in case of default, placing them lower in priority for repayment.

Bankrupt

A person who has made an assignment in bankruptcy or been forced into bankruptcy through a court order obtained by a creditor, and who has not been discharged from bankruptcy.

Discharged

The release or termination of an obligation, such as debt or duty, under certain conditions.