Question

bills payable comes under which type of liability
1. fixed liability ,2.current liability ,3.Fictitious liability, 4.Non of these
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Answer 1

Answer:

2 is right answer current liability

Answer 2

Bills payable come under (2) Current liability

Current liability-

• Current liabilities are an organization's short-time period financial obligations that might be due within 12 months or within a normal operating cycle.
• An operating cycle additionally known as the cash conversion cycle is the time it takes an organization to buy inventory and convert it to cash from sales.
• An instance of a current liability is debts to suppliers in the form of accounts payable.
• Bills are a short-term financial obligation.

Explanations to incorrect answers-

(1) Fixed liability- Fixed liabilities are the kind of liability that can be paid over a time period exceeding 12 months. Examples- bonds, mortgages. bonds, loans.

(3) Fictitious liability- These kinds of liabilities aren't real or actual and are simply imaginary or fabricated figures that are there in accounting records.

(4) None of these- Answer is Current liability which is given as option 2.

Hence, Bills payable come under (2) Current liability