Consider the following items :

1. Debentures

2. Accrued Interest

3. Prepaid Rent

4. Bank overdraft

Which of them are current liabilities ?

The correct answer is - 4

Key Points

• Bank Overdraft
  • A bank overdraft is considered a current liability because it is a short-term borrowing facility that must be repaid within a year.

Additional Information

• Debentures
  • Debentures are typically long-term liabilities because they are issued for a period longer than one year.
• Accrued Interest
  • Accrued interest is usually considered a current liability because it represents interest that has been incurred but not yet paid, and is typically due within one year.
• Prepaid Rent
  • Prepaid rent is not a liability; it is an asset because it represents an expense paid in advance for future benefits.