In regard to current liabilities which of the following is false? A. Current liabilities are liabilities that you recently paid. B. Accounts payable is normally a current liability. C. A $100,000 note payable with $10,000 of it due in six months would be classified on the balance sheet as a $10,000 current liability and a $90,000 long term liability. D. Current liabilities are debts and obligations that must be paid, settled or fulfilled within 12 months or less.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
In regard to current liabilities which of the following is false?
A. Current liabilities are liabilities that you recently paid.
B. Accounts payable is normally a current liability.
C. A $100,000 note payable with $10,000 of it due in six months would be classified on the balance sheet as a $10,000 current liability and a $90,000 long term liability.
D. Current liabilities are debts and obligations that must be paid, settled or fulfilled within 12 months or less.
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