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WAEC Financial Accounting 2016 Question 14

Question 14

Final Accounts of a Sole Trader

Which of the following items is a current liability?

  1. A.Stock of raw materials
  2. B.Cash in hand
  3. C.Bills payable
  4. D.Cash at bank
Show the answer and explanation

Answer: C (Bills payable)

Explanation

Bills payable are amounts the business must pay soon, so they are a current liability; the rest are current assets.