Question

Which of the following is not a current liability?

• A. Bills payable
• B. Bank overdraft
• C. Share capital
• D. Outstanding expenses

Hint:

Current liabilities are short-term obligations, while share capital represents ownership in the company, not a liability.

Answer 1

The Correct Option is C

Step 1: Understanding current liabilities.
Current liabilities are debts or obligations that a company needs to settle within a year or within the company's operating cycle. They include short-term debts like bills payable, bank overdrafts, and outstanding expenses.
Step 2: Analyzing the options.
- (A) Bills payable: This is a current liability. It refers to amounts owed by the company that are expected to be paid within the short term.
- (B) Bank overdraft: This is a current liability. It refers to the amount the company owes to the bank for withdrawing more than what is in its account.
- (C) Share capital: This is not a current liability. Share capital refers to the money invested by shareholders in exchange for shares of the company, and it represents ownership, not a debt.
- (D) Outstanding expenses: This is a current liability. It represents expenses that have been incurred but not yet paid, such as unpaid salaries or utilities.
Step 3: Conclusion.
The correct answer is (C) Share capital, as it represents ownership in the company, not a liability.
Final Answer: The correct answer is (C) Share capital.