Which of the following items is a current liability?
A) Bonds (for which there is an adequate sinking fund properly classified as a long-term investment) due in three months.
B) Bonds due in three years.
C) Bonds (for which there is an adequate appropriation of retained earnings) due in eleven months.
D) Bonds to be refunded when due in eight months, there being no doubt about the marketability of the refunding issue.

Question

Quizplus · Accepted Answer

Current liabilities are obligations expected to be settled within one year. Bonds due in eleven months, even with an appropriation of retained earnings, are considered current liabilities.

Which of the Following Items Is a Current Liability