Which of them are current liabilities?
1. Debentures
2. Prepaid rent
3. Interest accrued
4. Bank overdraft
Select the correct answer:
A. 1, 2, 3 and 4
B. Only 4
C. 2, 3 and 4
D. 1, 2 and 3
Answer: Option B
Solution (By Examveda Team)
Current liabilities are obligations that a company needs to settle within a year.1. Debentures are long-term liabilities, not current liabilities.
2. Prepaid rent is considered an asset, not a liability.
3. Interest accrued is a current liability as it represents interest that is owed but not yet paid.
4. Bank overdraft is a current liability because it is a short-term borrowing from a bank.
Therefore, the only correct current liability among the options is the bank overdraft.
This Question Belongs to Commerce >> Accounting
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ANS B IS CORRECT
OPTION B IS CORRECT.
DEBENTURES ARE LONG TERM LIABILITY.
PREPAID RENT IS EXPENSES PAID IN ADVANCE
INT ACCRUED IS O/S INCOME
SO BANK OVERDRAFT IS CORRECT
Current Liabilities include the liabilities which are paid within one year. One the other hand, debenture is the long term liability. Here the answer will be 2,3,4.
Answer Option C