BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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expected to be settled within the entity’s normal operating cycle
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held for purpose of trading
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due to be settled beyond 12 months
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for which the entity does not have the right at the end of the reporting period to defer settlement beyond 12 months.
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Detailed explanation-1: -A current liability is that liability which is to be settled within 12 months after the reporting date, i.e., balance sheet date.
Detailed explanation-2: -Current liabilities (also called short-term liabilities) are debts a company must pay within a normal operating cycle, usually less than 12 months (as opposed to long-term liabilities, which are payable beyond 12 months). Paying off current liabilities is mandatory.
Detailed explanation-3: -Current liabilities are a company’s short-term financial obligations that are due within one year or a normal operating cycle (e.g. accounts payable). Long-term (non-current) liabilities are obligations listed on the balance sheet not due for more than a year.
Detailed explanation-4: -A non-current liability refers to the financial obligations of a company that are not expected to be settled within one year. Examples of non-current liabilities include long-term leases, bonds payable, and deferred tax liabilities.