Which of the Following Statements About Current Liabilities Is True

question 80

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 liability section of a classified balance sheet.
• B)The amount of current liabilities has little implication for a company's liquidity.
• C)Current liabilities are the denominator in the formula for the current ratio.
• D)The current liabilities section of a classified balance sheet will never contain any portion of long-term liabilities.

---

Definitions:

Break-Even

is a financial term indicating the point at which costs or expenses and revenue are equal, resulting in no net loss or gain.

Total Revenue

The entire amount of income generated by the sale of goods or services before any deductions are made.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance, essential for budgeting and financial planning.

Variable Cost

Costs that vary directly with the level of production or service provision, such as materials and labor.