Most companies pay current liabilities
A) out of current assets.
B) by issuing interest-bearing notes payable.
C) by issuing stock.
D) by creating long-term liabilities.

Question

Quizplus · Accepted Answer

Current liabilities are expected to be paid within a year, and the most common way companies pay them is by using their current assets, such as cash and accounts receivable. Option B and D are incorrect because they suggest creating long-term liabilities or issuing notes payable, which are not appropriate for current liabilities. Option C is also incorrect because issuing stock does not directly relate to paying current liabilities.

Most Companies Pay Current Liabilities