Which of the following is a current liability?
Correct answer: C. Outstanding Salaries
- A. Prepaid expenses
- B. Trademark
- C. Outstanding Salaries
- D. Discount on issue of shares
Explanation
Outstanding salaries are expenses incurred but not yet paid, creating a short-term obligation and therefore a current liability. Prepaid expenses are current assets, while trademarks and share-issue discounts are non-current items.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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