Which of the following items is a current liability?
-
A.
Stock of raw material -
B.
Cash in hand -
C.
Bills payable -
D.
Cash at bank
Correct Answer: Option C
Explanation
Current liabilities are amounts due to be paid to creditors within twelve months.
The following are common examples of current liabilities:
- Accounts payable. These are the trade payables due to suppliers, usually as evidenced by supplier invoices.
- Sales taxes payable.
- Payroll taxes payable.
- Income taxes payable.
- Interest payable.
- Bank account overdrafts.
- Accrued expenses.
- Customer deposits.