When can liability be classified as current?

A. Current liabilities are obligations that the firm expects to liquidate through the use of cash. Current liabilities will typically be paid within 30 days. Current liabilities commonly include accounts payable and short-term and long-term notes payable.

B. Current liabilities are obligations that the firm expects to liquidate through the use of current assets or the creation of other current liabilities. Current liabilities will typically be paid within one year or an operating cycle, whichever is longer. Current liabilities commonly include accounts payable, short-term notes payable, current maturities of long-term debt, accrued liabilities, and unearned revenues.

C. Current liabilities are obligations that the firm expects to liquidate by obtaining long-term debt. Current liabilities will typically be paid within 30 days. Current liabilities commonly include only accounts payable and short-term notes payable.

D. Current liabilities are obligations that the firm expects to liquidate through the use of both current assets and the creation of other current liabilities. Current liabilities will typically be paid within three operating cycles. Current liabilities commonly include accounts payable, short-term notes payable, long-term debt, and accrued liabilities.