Which of the following items is a current liability?
- Stock of raw material
- Cash in hand
-
Bills payable
- Cash at bank
The correct answer is: 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.