Fill in the blank: Accounts payable and income taxes are examples of _____.

current assets

current liabilities

fixed assets

COGS


Choose an option to see if it’s correct. Check the explanation below.

Want to Earn All HubSpot Certifications in No Time?

Then check out our exclusive 👉 HubSpot Special Offer All in One!. This comprehensive package includes questions, answers, and detailed explanations for each Hubpot certification. Get everything you need to achieve success faster.

Explanation: Fill in the blank: Accounts payable and income taxes are examples of _____.


Explanation: The correct answer is **current liabilities**. Accounts payable and income taxes are both examples of financial obligations that a company owes and is expected to settle within a relatively short period, typically within one year or the operating cycle, whichever is longer. Current liabilities encompass obligations that require the use of current assets or the creation of other current liabilities to settle, and they represent the company's short-term financial obligations that are due within the next twelve months. Accounts payable refers to the amounts owed to suppliers or vendors for goods or services purchased on credit, while income taxes payable represent the taxes owed to government authorities based on the company's taxable income. Both accounts payable and income taxes payable are classified as current liabilities on the balance sheet because they are expected to be settled in the short term, usually within the next accounting period. By categorizing these obligations as current liabilities, companies can assess their short-term financial obligations and ensure they have adequate liquidity to meet their payment obligations as they come due. Therefore, current liabilities accurately describe accounts payable and income taxes payable as financial obligations due within a relatively short timeframe, making it the correct answer.
HubSpot Roll Special Offer

Special Bundle Offer HubSpot Roll. All in One

Note: We conduct daily checks for updates on the exam, ensuring that the file contains the most recent questions from the actual certification program.

Questions | Answers | Explanations. FREE Updates.

You may also be interested: