Given that most current liabilities will be settled with cash,it is important to identify and record these liabilities separately because it helps users to assess
A)solvency.
B)cash position.
C)net income.
D)liquidity.

Question

Quizplus · Accepted Answer

Identifying and recording current liabilities separately helps users to assess the liquidity of a company, or its ability to meet its short-term obligations with available cash or cash equivalents. This is important for investors and creditors who want to make informed decisions about lending money or investing in a company. Solvency and net income are more closely tied to long-term obligations, while cash position is a broader term that includes both assets and liabilities.

Given That Most Current Liabilities Will Be Settled with Cash,it