Future Business Leaders of America (FBLA) Agribusiness Practice Test

Which of the following describes liabilities that are not due within the year?

1. Current liabilities

2. Contingent liabilities

3. Non-current liabilities

4. Long-term liabilities

The correct answer is: Non-current liabilities

Liabilities that are not due within the year are best described as non-current liabilities. Non-current liabilities refer to obligations that a business is expected to settle beyond one year. These could include long-term loans, bonds payable, and deferred tax liabilities. Understanding non-current liabilities is crucial for analyzing a company's long-term financial health and stability, as they can have significant implications on cash flow and financial planning. While long-term liabilities is often used interchangeably with non-current liabilities, the term non-current encompasses all obligations due beyond one year, including both long-term liabilities and other types of non-current obligations that may not be specifically classified as long-term. Current liabilities, on the other hand, are due within a year and contingent liabilities depend on certain conditions being met in the future, making them distinct categories separate from non-current liabilities.