Question

Short-term Liabilities are those liabilities which _____________.

• A. fall due for payment within a period of less than 8 months
• B. fall due for payment beyond a period of 12 months
• C. fall due for payment within a period of not more than 12 months
• D. none of these

Answer 1

Answer: (C)

fall due for payment within a period of not more than 12 months

Short-term liabilities also known as current liabilities of an eterprise are financial obligation that is to be paid within one year.

A liability is a current liability if it satisfies any one of the following criteria:-

1. it is expected to be settled in the company's normal operating cycle; or

2. it is held primarily for the purpose of being traded; or

3. it is due to be settled within 12 months after the reporting date; or

4. the company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.