How are current liabilities related by definition to current assets? How are current liabilities related to a company's operating cycle?

How are current liabilities related by definition to current assets? How are current liabilities related to a company's operating cycle?



Current liabilities are obligations whose liquidation is reasonably expected to require the use of existing resources properly classified as current assets or the creation of other current liabilities.

Because current liabilities are by definition tied to current assets and current assets by definition are tied to the operating cycle, liabilities are related to the operating cycle.


Learn More :