What is the key distinction between current and non-current liabilities?
A) Current liabilities will be paid off within one year or one operating cycle.
B) Non-current liabilities are permanent debts of the business.
C) Current liabilities always have lower balances than non-current liabilities.
D) Non-current liabilities always increase over time.

Question

Quizplus · Accepted Answer

The key distinction between current and non-current liabilities is that current liabilities are debts that are due within one year or one operating cycle, while non-current liabilities are debts that are not due within the next year or operating cycle. This means that current liabilities are more short-term in nature, while non-current liabilities are more long-term in nature.

What Is the Key Distinction Between Current and Non-Current Liabilities