Question

Which of the following is not an example of a current liability?

1) Dividends Payable
2) Preferred dividends in arrears
3) Unearned Revenue
4) Sales Tax Payable

Answer 1

Preferred dividends in arrears is not an example of a current liability. Dividends Payable, Unearned Revenue, and Sales Tax Payable are all examples of current liabilities.

Step-by-step explanation:

Out of the options given, Preferred dividends in arrears is not an example of a current liability. Current liabilities are the obligations that a company is expected to settle within one year or its operating cycle, whichever is longer.

Dividends Payable refers to the dividends that a company has declared but has not yet paid to its shareholders. Unearned Revenue represents the cash received by a company in advance for goods or services that it has not yet provided.

Sales Tax Payable is the amount of sales tax that a company has collected from its customers but has not yet remitted to the relevant tax authority.