ACCT 2101 Lecture 10: Chapter 9: Current Liabilities

9. Which of the following is a typical example of a current liability? A) Revenue collected in advance. B) Accrued interest payable. C) The current portion of a long-term debt. D) All of the above are correct.

15-9 A company seeking a line of credit at a bank was turned down. Among other things, the bank stated that the company's 2 to 1 current ratio was not adequate. Give reasons why a 2 to 1 current ratio might not be adequate.

Current Liabilities

The following are accounts commonly used in accountinginformation systems:

1. Accounts payable

2.Saaries payable

3.Common stock

4.Current portion of long-term debt

5.Unearned revenue

6.Notes payable (due in 60 days)

7.Taxes payable

8.Allowance for doubtful accounts

9.Notes payable (due in 2 years)

Required: Identify whether each item would be classified on abalance sheet as a current liabiity, a long-term liability, orsomething else.