Current liabilities can't exceed the amount incurred in one operating cycle. Liquidation of current liabilities is reasonably expected within the company's operating cycle (or one year if less). There is no relationship between the two.

Current liabilities can't exceed the amount incurred in one operating cycle. Liquidation of current liabilities is reasonably expected within the company's operating cycle (or one year if less). There is no relationship between the two.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 2MC: That companies can present useful information in shorter time periods such as years, quarters, or...

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Question

What is the relationship between current liabilities and a company's operating cycle?

Select one:

Current liabilities can't exceed the amount incurred in one operating cycle.
Liquidation of current liabilities is reasonably expected within the company's operating cycle (or one year if less).
There is no relationship between the two.
Current liabilities are the result of operating transactions.

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