
Concept explainers
Concept Introduction
Current Liabilities:
Current Liabilities are the debts or economic obligations that a company owes to its creditors and that have to be settled within one year or within its operating cycle, whichever period is longer.
Operating Cycle:
An operating cycle represents the average period of time that a company takes to acquire inventory, sell the inventory and collect cash from its customers for the inventory sold to them.
To Find:
The items that are normally classified as current liabilities for a company that has a 15-month operating cycle from the options given in the question.
Given Info:
The following items are given for classifying current liabilities (and non-current liabilities) for a company that has a 15-month operating cycle:
- Portion of long-term note due in 15 months.
- Note payable maturing in 2 years.
- Note payable due in 18 months.
- Note payable due in 11 months.
- FICA taxes payable.
- Salaries payable.

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Chapter 11 Solutions
Fundamental Accounting Principles
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