Common Current Liabilities

Question 1

Liabilities incurred in obtaining goods and services from vendors in the entity’s ordinary course of business

Answer 1

Accounts Payable

Question 2

Amounts owed to employees and others for services that have been recorded as assets or expenses but have not yet been paid in cash.

Answer 2

Accrued Expenses

Question 3

Unpaid obligations to creditors that are evidenced by a note, such as a short- term bank loan. These notes may be either interest-bearing or noninterest-bearing instruments.

Answer 3

Notes Payable

Question 4

Amounts of long-term debt that must be paid during the next 12 months.

Answer 4

Current Maturities on Long-Term Debt

Question 5

Taxes that must be paid to taxing authorities during the next 12 months.

Answer 5

Taxes Payable

Question 6

Once dividends are declared, they represent legal obligations due within one year.

Answer 6

Dividends Payable

Question 7

Revenue collected in cash or billed but not yet earned, such as magazine subscriptions that will be earned in the future, typically, within the next 12 months. Sometimes referred to as unearned revenue.

Answer 7

Deferred Revenue