Question

Which of the following is shown under “Current Liabilities” in the Balance Sheet?

• A. Goodwill
• B. Bills Payable
• C. Machinery
• D. Investments

Hint:

Current Liabilities are those expected to be settled within 12 months. Common examples are Creditors, Bills Payable, Short-term Loans, and Outstanding Expenses.

Answer 1

The Correct Option is B

Step 1: Understanding the Question:
The question asks to identify a current liability item from the given list according to the standard balance sheet classification.

Step 2: Detailed Explanation:
1. Goodwill: Classified under Non-Current Assets (Intangible Assets).
2. Bills Payable: These are short-term financial obligations usually payable within 12 months or the operating cycle. Hence, they are Current Liabilities.
3. Machinery: Classified under Non-Current Assets (Property, Plant, and Equipment).
4. Investments: Generally classified as Non-Current Assets (unless specified as current or marketable securities).

Step 3: Final Answer:
Bills Payable is shown under Current Liabilities.