Chapter 4, Problem 19Q

To determine

Current Liabilities: Current liabilities are those obligations for the company which it is supposed to pay within a year or within the same accounting period, whichever is longer. They include accounts payable, wages, salaries to employees, interest payable and so on.

Current Assets: Current assets are those classifications of assets that can be converted to cash within one year or within one operating cycle, whichever is longer, for example, accounts receivables, supplies and so on. They are the assets that can be easily converted into cash and include all the liquid assets. Cash is the most liquid current asset.

To Identify: The current liabilities of A Company using its annual report and also to identify whether the current liabilities are higher or lower than the current assets for the given two years.