Which of the Following Is the Best Definition of a Current

question 123

Multiple Choice

Which of the following is the best definition of a current liability?

• A) An obligation payable within one year.
• B) An obligation payable within one year of the balance sheet date.
• C) An obligation payable within one year or within the normal operating cycle, whichever is longer.
• D) An obligation expected to be satisfied with current assets or by the creation of other current liabilities.

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Definitions:

Trading Partner

An entity or country that engages in commerce or trade with another, often under agreed terms or through treaties.

Held Up

Delayed or stopped by something or someone, causing a pause in progress or movement.

Average Variable Costs

The total variable costs (costs that change with output level) divided by the quantity of output produced.

Average Costs

The total cost of production divided by the number of goods produced, a measure of cost efficiency.