A current liability is an obligation that requires the use of an existing asset or the creation of another current liability:
A) Within the coming year or the operating cycle, whichever is shorter
B) Within the coming year or the operating cycle, whichever is longer
C) Within the coming year
D) Within the next operating cycle
E) None of the above

Question

Quizplus · Accepted Answer

A current liability is defined as an obligation that a company expects to pay within the coming year or within its operating cycle, whichever is longer. This definition allows for the inclusion of liabilities that may extend slightly beyond a year if the company's operating cycle is longer than one year.

A Current Liability Is an Obligation That Requires the Use