Which of the Following Statements About Current Liabilities Is True

question 83

Multiple Choice

Which of the following statements about current liabilities is true?

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

---

Definitions:

Inventory Write-Downs

Reductions in the book value of inventory that occur when the market value drops below the cost recorded on the financial statements.

Financial Reporting Philosophy

A set of underlying principles and guidelines that dictate how financial statements are prepared and presented, aiming to provide accurate, transparent, and comprehensive financial information to users.

U.S. GAAP

United States Generally Accepted Accounting Principles, a collection of rules and procedures created to govern corporate accounting and financial reporting in the U.S.

Financial Reports

Documents that provide an overview of a company's financial condition in a given period, including income statements, balance sheets, and cash flow statements.