Final answer:
Offsetting current liabilities against assets on the balance sheet is not an acceptable treatment, as it does not accurately reflect asset-liability time mismatches and can obscure accurate financial reporting. Current liabilities should be presented separately to maintain transparency.
Step-by-step explanation:
The treatment of current liabilities on the balance sheet must follow certain accounting standards. Of the options provided, the one that is not acceptable is:
C. Offsetting current liabilities against assets that are to be applied to their liquidation.
This method is not generally acceptable as it fails to clearly reflect the asset-liability time mismatch, which is a critical aspect of a company's financial health. Current liabilities should be presented separately from assets on the balance sheet, as this offers a more transparent view of a company's obligations and bank capital. Options A, B, and D are generally acceptable practices for the presentation of current liabilities, with A and D being quite common and B being used less frequently but still acceptable. However, C could potentially obscure the true financial position, which stakeholders rely on for decision-making purposes.