Question
Which of the following are included in current liabilities?
I. note payable to a supplier in eight months
II. amount due from a customer next month
III. account payable to a supplier that is due next week
IV. Ioan payable to the bank in fourteen months
I and III only
II and III only
I, II, and III only
0 I, III, and IV only
I, IIIII, and IV
I. note payable to a supplier in eight months
II. amount due from a customer next month
III. account payable to a supplier that is due next week
IV. Ioan payable to the bank in fourteen months
I and III only
II and III only
I, II, and III only
0 I, III, and IV only
I, IIIII, and IV
Ask by Lewis Long. in the United States
Mar 24,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
I and III only
Solution
Step 1: Identify the Definition of Current Liabilities
Current liabilities are obligations that a company is expected to settle within one year (or one operating cycle if longer).
Step 2: Analyze Each Item
-
Note payable to a supplier in eight months
Because this note is due in eight months, which is less than one year, it is considered a current liability. -
Amount due from a customer next month
This is an amount receivable, not a payable. It represents money to be received from a customer and is classified as a current asset, not a liability. -
Account payable to a supplier that is due next week
Since this is due next week, it clearly qualifies as a current liability. -
Loan payable to the bank in fourteen months
With the due date in fourteen months, this obligation will not be settled within one year, making it a long-term liability rather than a current liability.
Step 3: Determine Which Items Are Current Liabilities
Based on the analysis above, the items included in current liabilities are:
Final Answer: I and III only
Answered by UpStudy AI and reviewed by a Professional Tutor
Like
error msg
Explain 
Simplify this solution Mind Expander
Current liabilities refer to obligations that a company expects to settle within one year or within its operating cycle, whichever is longer. In your examples, note payable to a supplier in eight months and account payable to a supplier due next week are indeed current liabilities, while a loan payable in fourteen months is not. So, the correct answer would be “I and III only.”
To better understand current liabilities, think of them as a company’s short-term to-do list! They include things like unpaid bills to suppliers, taxes due, and wages owed. Managing these effectively ensures that a business maintains liquidity and avoids cash flow troubles—definitely something to keep an eye on!
