Which of the following statements BEST describes the difference between current and long-term liabilities?
A) Current liabilities are debts that need to be paid immediately, whereas long-term liabilities do not.
B) Current liabilities are those which will cost less in debt interest than long-term liabilities.
C) Current liabilities are debts that are settled sooner than long-term debts.
D) Current liabilities are debts on tangible assets, whereas long-term liabilities are debts on intangible assets.
E) Current liabilities are debts on current assets, whereas long-term liabilities are debts on fixed and intangible assets.

Question

Quizplus · Accepted Answer

Current liabilities are debts that are due within one year or the operating cycle, whichever is longer. Long-term liabilities are debts that are due over a longer period of time, typically more than one year. Therefore, current liabilities must be settled sooner than long-term liabilities.

Which of the Following Statements BEST Describes the Difference Between