Regarding current liabilities, which statement is true ? 1.Payables are accounts for materials and supplies used...
Regarding current liabilities, which statement is true ?
1.Payables are accounts for materials and supplies used in the production <br /> of goods and services.
2.prepayments are made to reduce production costs during an operations cycle.
3.Payables are accounts for debts maturing in the next 12 months.
4.Prepayments are made to reduce short-term debts unrelated to the <br /> operations cycle.
Homework Answers
The correct statement is
1.Payables are accounts for materials and supplies used in the production of goods and services.
Payable are for the material and supplies purchased on account and are paid within the operating cycle.
Prepayment will not reduce production costs.
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