Current Liabilities Are Obligations Due Within

question 94

Multiple Choice

Current liabilities are obligations due within:

• A) one year or within the company's normal operating cycle if it is longer than one year
• B) one year or within the company's normal operating cycle if it is shorter than one year
• C) one month or within the company's normal operating cycle if it is longer than one month
• D) one month or within the company's normal operating cycle if it is shorter than one month

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Definitions:

X-Inefficiency

A situation in which a firm fails to utilize its resources efficiently because of a lack of competitive pressure.

Average Total Costs

The total cost of production divided by the quantity produced, representing the per-unit cost of producing a good or service.

Economies Of Scale

Operational scale increases lead to cost efficiencies for businesses, prominently reflecting in reduced production costs per unit as the amount of output grows.

Diseconomies Of Scale

The situation when a firm’s average total cost of producing a product increases in the long run as the firm increases the size of its plant (and, hence, its output).