Question

Explain any three components of the accounts group 'Current Liabilities'.

Answer 1

The components of the accounts group of Current Liabilities are Bank overdraft, Creditors, Bills Payable, and so on.
Components of Current Liabilities are explain as follows:

1. Bank Overdrafts -
   The overdraft allows the account holder to continue withdrawing money even when the account has no funds in it or has insufficient funds to cover the amount of the withdrawal. Basically, an overdraft means that the bank allows customers to borrow a set amount of money.

2. Creditors -
   A creditor could be a bank, supplier or person that has provided money, goods, or services to a company and expects to be paid at a later date. In other words, the company owes money to its creditors and the amounts should be reported on the company's balance sheet as either a current liability or a non-current (or long-term) liability.

3. Bills Payable -
   A bill payable is a document which shows the amount owed for goods or services received on credit (meaning not paid at the time that the goods or services were received). The provider of the goods or services is referred to as the supplier or vendor. Hence, a bill payable is also known as an unpaid vendor invoice.