An Account That Would Be Classified as a Current Liability

question 39

Multiple Choice

An account that would be classified as a current liability is

• A) Dividends payable in stock
• B) Accounts payable - debit balance
• C) Reserve for possible losses on purchase commitments
• D) Excess of replacement cost over LIFO cost of basic inventory temporarily liquidated

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Definitions:

Sabbath Day

A day set aside for rest and worship according to Jewish, Christian, and some other religions’ traditions, typically observed from sunset on Friday to sunset on Saturday in Judaism and on Sunday in Christianity.

Promissory Estoppel

A legal principle preventing a party from retracting a promise when the other party has reasonably relied on that promise and acted upon it, leading to a detriment.

Reasonable Reliance

Relying on a statement or action in a manner that a reasonable person would consider justified under the circumstances.

UCC

The United States has implemented the Uniform Commercial Code, a wide set of legal principles, to govern commercial exchanges.