Question

Dividends payable is classified as a long-term liability. stockholders' equity account. contra stockholders' equity account to retained earnings. current liability.

Answer 1

Current liability is the right answer.

Dividends payable is classified as a Current liability.

Current Liabilities: What Are They?

• A company's short-term financial commitments that are due in a year or within a typical operational cycle are known as current liabilities.
• An organization's operational cycle, also known as the cash conversion cycle, is the period of time it takes to buy inventory and turn that inventory into cash through sales.

Which five obligations are examples?

Liabilities include things like:

• bank debt.
• mortgage debt
• Payment due to suppliers (accounts payable)
• unpaid wages.
• tax debt.

What three categories of liabilities exist?

Liabilities are primarily divided into three categories. They are:

• short-term obligation
• long-term commitments
• contingent obligations.

The most frequent liabilities you will encounter in your company are likely to be current and long-term.

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