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Which statement about current liabilities is true?

  1. A They are obligations due within one year or the operating cycle
  2. B They are obligations owed after a 12-month period
  3. C They are always reported under long-term liabilities
  4. D They are obligations owed over five years
Answer

They are obligations due within one year or the operating cycle

Current liabilities are settled within one year or the normal operating cycle, whichever is longer. Anything beyond that is a non-current liability.

All Accounting MCQs

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