An item that must be paid within one year or one operating cycle of the firm is classified as a:
A) current liability.
B) long-term asset.
C) current asset.
D) None of the choices are correct.

Question

Quizplus · Accepted Answer

The definition provided in the question matches the characteristics of a current liability, which is an obligation that must be paid within one year or one operating cycle of the firm. Examples of current liabilities include accounts payable, salaries payable, and short-term loans. Therefore, the best choice is A - current liability.

An Item That Must Be Paid Within One Year or One