A delivery company is creating a balance sheet.Which of the following would most likely be considered a short-term liability on this balance sheet?
A)the depreciation over the last year in the value of the vehicles owned by the company
B)revenue received for the delivery of items that have not yet been delivered
C)a loan which must paid back in two years' time
D)prepaid rent on the offices occupied by the company

Question

Quizplus · Accepted Answer

Revenue received for the delivery of items that have not yet been delivered is a short-term liability because the delivery company has received payment but has not yet fulfilled their obligation to deliver the items. The other options are long-term liabilities (C- a loan that must be paid back in two years' time) or assets (A- depreciation of owned vehicles, and D- prepaid rent on offices).

A Delivery Company Is Creating a Balance Sheet