5. Which of the following is a characteristic of a current liability? OA current liability must be of a known amount. OA current liability is due within one year or one operating cycle, whichever is longer. OA current liability must be of an estimated amount. Current liabilities are subtracted from long-term liabilities on the balance sheet.

5. Which of the following is a characteristic of a current liability? OA current liability must be of a known amount. OA current liability is due within one year or one operating cycle, whichever is longer. OA current liability must be of an estimated amount. Current liabilities are subtracted from long-term liabilities on the balance sheet.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

5. Which of the following is a characteristic of a current liability?
OA current liability must be of a known amount.
OA current liability is due within one year or one operating cycle, whichever is longer.
A current liability must be of an estimated amount.
Current liabilities are subtracted from long-term liabilities on the balance sheet.

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