Intermediate Accounting 14th Edition

Published by Wiley
ISBN 10: 0470587237
ISBN 13: 978-0-47058-723-2

Chapter 5 - Balance Sheet and Statement of Cash Flows - Questions - Page 279: 12

Answer

The relationship between current liabilities and current assets is that current liabilities refer to obligations that should be liquidated either through other current liabilities or current assets.

Work Step by Step

A good example can be using your cash at hand (current asset) to settle a bank overdraft (current liability).
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