Which item is a current liability?

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Study for the ACFE Accounting Terms Test with interactive quizzes. Prepare with multiple choice questions, each question accompanied by explanations and hints. Ensure your success with our study materials!

Multiple Choice

Which item is a current liability?

Explanation:
Current liabilities are obligations that must be settled within one year or the operating cycle, whichever is longer. Wages payable due in 30 days fits this timeframe, so it is classified as a current liability. The mortgage payable due in 15 years and the bonds payable due in 10 years are long-term liabilities because their settlements extend beyond one year. The note payable due in 18 months is not a current liability for the same reason, since it exceeds one year (though any portion due within the next year would be treated as current).

Current liabilities are obligations that must be settled within one year or the operating cycle, whichever is longer. Wages payable due in 30 days fits this timeframe, so it is classified as a current liability. The mortgage payable due in 15 years and the bonds payable due in 10 years are long-term liabilities because their settlements extend beyond one year. The note payable due in 18 months is not a current liability for the same reason, since it exceeds one year (though any portion due within the next year would be treated as current).

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