| N | |
| Creditors | 7,940 |
| Prepaid expenses | 290 |
| Accrual expenses | 323 |
| Stock | 4,500 |
| Cash balances | 4,956 |
| Debtors | 905 |
Use the information in the above table to answer the question.
Determine the current liabilities.
-
A.
N8,553 -
B.
N8,263 -
C.
N7,940 -
D.
N1,228
Correct Answer: Option B
Explanation
In accounting, current liabilities are often understood as all liabilities of the business that are to be settled in cash within the fiscal year or the operating cycle of a given firm, whichever period is longer. example
- Accounts payable.
- Salaries payable.
- Short-term debt payable.
- Short-term notes payable.
- Current lease liability
From the table above, current liabilities = creditors + accruals expenses. Hence we have;
7,940+323= 8,263