
Concept explainers
Current liability
Current liability is an obligation that the companies need to pay from the remaining current assets or creation of other current liabilities within a fiscal year or the operating cycle whichever is higher.
To Explain: If the belief of JP that a current liability is a debt, that is paid within one year is correct or not.

Answer to Problem 1Q
Yes JP is correct, current liability is a debt that can be expected to be paid within a fiscal year.
Explanation of Solution
Current liability is a debt that can be paid within a fiscal year or operating cycle whichever is longer. If the debt paid more than one year means, it doesn’t form the part of a current liability.
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Chapter 10 Solutions
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