Question

Which of the following are current liabilities?
(I) Creditors
(II) Unexpired Insurance
(III) Bank overdraft
(IV) Rent due

• A. I, II and III
• B. II,III and IV
• C. I,III and IV
• D. All of them

Answer 1

Answer: (C)

I,III and IV

Current Liabilities are those which need to be repaid within a short period of time, this may be a year or a business cycle. Current Liabilities are arise out of normal business operations. Following are the examples of current liabilities:

• Sundry Creditors- Suppliers who provides goods or services on credit
• Bank Overdraft- A temporary facility provided by the bank
• Rent Due- Outstanding expenses against which services are already taken.