Question

According to the revised scheduled iii, which of the following is a current liability?

1) Accounts payable
2) Property, plant, and equipment
3) Long-term debt
4) Retained earnings

Answer 1

Accounts payable is the correct answer as it is a current liability that a company is expected to pay within the next year, as per the revised Schedule III.

Step-by-step explanation:

According to the revised Schedule III, the category of current liability includes obligations that a company is expected to settle within its normal operating cycle, or within a year. The options given in the question include various types of items that could appear on a company's balance sheet. When it comes to identifying a current liability from the list, Accounts payable fits this description, as it represents money owed to suppliers or vendors for goods or services received that are due within the upcoming year. In contrast, Property, plant, and equipment is a long-term asset, Long-term debt is a liability but not due within the next year, and Retained earnings represent a component of shareholders' equity, not a liability.

Answer 2

Accounts payable is the current liability according to the revised Schedule III. Property, plant, and equipment is a long-term asset, long-term debt is a liability but not current, and retained earnings is part of shareholders' equity.

Step-by-step explanation:

According to the revised Schedule III, the item that is considered a current liability is 1) Accounts payable. Current liabilities are debts or obligations that are due to be settled within one fiscal year or the operating cycle, whichever is longer. Examples of current liabilities include accounts payable, short-term loans, dividends payable, and accrued expenses.

Property, plant, and equipment are classified as long-term assets, not liabilities. Long-term debt is a liability, but it is not due within the short-term period; hence, it is not classified as a current liability. Retained earnings is a part of shareholders' equity and not a liability at all.