A current liability is a debt that can reasonably expected to be paid
A) between 6 months and 18 months.
B) out of currently recognized revenues.
C) within one year.
D) out of cash currently on hand.

Question

Quizplus · Accepted Answer

A current liability is defined as a debt that is expected to be paid within one year or within the operating cycle of a business, whichever is longer. This means that the debt must be payable within a relatively short period of time and can be reasonably expected to be paid using current assets or by the creation of other current liabilities. Therefore, choice (C) "within one year" is the best answer.

A Current Liability Is a Debt That Can Reasonably Expected