Asked by nohamin tekele on May 27, 2024
Verified
Current liabilities are reported on the balance sheet at
A) current market value.
B) historical cost.
C) discounted present value.
D) future value.
Current Liabilities
Short-term financial obligations due within one year or within the normal operating cycle of a business, such as accounts payable and short-term loans.
Current Market Value
The most recent price at which an asset or service can be bought or sold in a competitive marketplace.
Historical Cost
The original monetary value of an asset or transaction, used as a basis for accounting and not adjusted for inflation.
- Identify and segment the diverse categories of liabilities and equity included in the balance sheet.
Verified Answer
BN
Brittany NicoleMay 28, 2024
Final Answer :
B
Explanation :
Current liabilities are reported on the balance sheet at historical cost, which is the amount of money that was originally paid or agreed to be paid for the liability. This reflects the amount owed at the time it was incurred and provides a more accurate picture of the company's financial obligations. Reporting at current market value, discounted present value, or future value would not be appropriate for current liabilities.
Learning Objectives
- Identify and segment the diverse categories of liabilities and equity included in the balance sheet.