ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Expert-Verified Answer. According to the given information Cash is NOT an example of a liability.

Detailed explanation-2: -Redeemable debentures are not current liabilities.

Detailed explanation-3: -Current liabilities are typically settled using current assets, which are assets that are used up within one year. Current assets include cash or accounts receivable, which is money owed by customers for sales.

Detailed explanation-4: -When bank customers deposit money into a checking account, savings account, or a certificate of deposit, the bank views these deposits as liabilities. After all, the bank owes these deposits to its customers, and are obligated to return the funds when the customers wish to withdraw their money.

Detailed explanation-5: -The cash is a liability, because if the commercial bank goes back to the central bank and gives back the cash, the central bank will have to give back the loans (or government bonds). So while it’s true that cash is not backed by gold, it is still backed by something.