Which of the following is not acceptable treatment for the presentation of current liabilities?
A)Listing current liabilities in order of maturity
B)Listing current liabilities according to amount
C)Offsetting current liabilities against assets that are to be applied to their liquidation
D)Showing current liabilities immediately below current assets to obtain a presentation of working capital

Question

Quizplus · Accepted Answer

Offsetting current liabilities against assets that are to be applied to their liquidation is not an acceptable treatment for the presentation of current liabilities as it can be misleading and mask the actual amount of liabilities that need to be settled with external sources. Generally, current liabilities are presented in order of maturity or urgency of payment, or according to their source, such as accounts payable, salaries and wages payable, taxes payable, etc. Showing current liabilities immediately below current assets to obtain a presentation of working capital is also an acceptable treatment, but it is not the only or best choice for presenting current liabilities.

Which of the Following Is Not Acceptable Treatment for the Presentation