Question

Damian, a recent college graduate with a degree in accounting, is helping a newly formed construction company set up its accounting system. Although the company had purchased accounting software, Damian wants to make certain that future reports will distinguish between current liabilities and long-term liabilities. In the future, he will need to know the amount of total current liabilities in order to

Answer 1

Answer:

Analyze whether the company has enough funds to pay the near term bills

Explanation:

Damian, a recent college graduate with a degree in accounting, is helping a newly formed construction company set up its accounting system. Although the company had purchased accounting software, Damian wants to make certain that future reports will distinguish between current liabilities and long-term liabilities. In the future, he will need to know the amount of total current liabilities in order to Analyze whether the company has enough funds to pay the near term bills

Answer 2

In the future, he will need to know the amount of total current liabilities in order to Analyze whether the company has enough funds to pay the near term bills.

• When a company has an adequate cash position to pay near-term, is is good that they analyze if the company has enough funds to pay bills that come due in less than a year.

An accountant can examine the balance sheet to separate current liabilities from long-term liabilities.

Current Liabilities are simply known as liabilities that are due within the prevailing financial years.

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