A firm's current liabilities:
A) include wages payable.
B) are not represented on its balance sheet.
C) do not have to be repaid within a year.
D) must equal its current assets.

Question

Quizplus · Accepted Answer

Current liabilities are obligations that have to be paid within a year or within the operating cycle of the business. Wages payable are one type of current liability that is included on a firm's balance sheet. Option B is incorrect as current liabilities are always represented on the balance sheet. Option C is incorrect as current liabilities must be repaid within a year, as mentioned earlier. Option D is incorrect as current liabilities do not have to equal current assets; rather, current assets should be greater than current liabilities to ensure the firm's liquidity.

A Firm's Current Liabilities