Current Liabilities Are Defined as Those Liabilities Which Will Be

question 56

Multiple Choice

Current liabilities are defined as those liabilities which will be satisfied

• A) by the end of the operating cycle.
• B) within one year.
• C) within one year or within the operating cycle, whichever is longer.
• D) within one year or within the operating cycle, whichever is shorter.

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Definitions:

Withheld

Refers to the portion of an individual’s earnings that is not directly paid to the individual by the employer, because it is set aside for purposes such as tax payments.

Times Interest Earned Ratio

A financial metric used to determine how easily a company can pay interest on outstanding debt with its before-tax earnings.

Interest Expense

The expense an entity faces for using borrowed capital, usually shown on the income statement.

Wage Bracket Withholding Table

A chart used by employers to determine the amount of tax to withhold from an employee’s paycheck based on their earnings and tax bracket.