2021 · Q108
When are current liabilities payable?
General Accounting Principles, Auditing and InsuranceFinal accounts
- AWithin a year
- BAfter one year but within five years
- CWithin five years
- DSubject to a contingency
Explanation
Current liabilities are obligations a business must settle within one year (or within its operating cycle if longer) — e.g. creditors, short-term loans and outstanding expenses. Longer horizons describe non-current liabilities, and contingent liabilities depend on uncertain future events. Hence (A) within a year is correct.