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Question

For a company, Bank Overdrafts and Outstanding Expenses will be termed as

A Current Liabilities Correct Answer Incorrect Answer
B Long term liabilities Correct Answer Incorrect Answer
C Current Assets Correct Answer Incorrect Answer
D Other Long-term liabilities Correct Answer Incorrect Answer
E Borrowings Correct Answer Incorrect Answer

Solution

Bank overdraft is a short-term working capital borrowing and outstanding expenses are expenses accrued and not paid by the company. In both cases the company owes money to someone else in a period less than a years and it is therefore current liability for the company.

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