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Liabilities are present obligations to sacrifice assets in the future because of something that already has occurred. Current liabilities are expected to require current assets $($or the creation of other current liabilities$)$ and usually are payable within one year.

Knowledge Check $01$

Which of the following statements about liabilities is true?

Multiple Choice

In part, liabilities are probable, future sacrifices of economic benefits that result from past transactions or events.

Current liabilities as obligations payable within one year from the balance sheet date or within the firm$$s operating cycle, whichever is shorter.

Liabilities ordinarily are recorded at their maturity amounts.

In practice, liabilities payable after one year from the balance sheet date ordinarily are recorded at their maturity amounts.