As per IAS 1, current liabilities are those expected to be settled within the entity`s ___________ operating cycle.a.6-monthsb.normalc.3-monthsd.abnormal

Break Down the Problem

1. Identify the key components of IAS 1 regarding current liabilities.
2. Determine what is meant by an entity's operating cycle.

Relevant Concepts

• IAS 1 (International Accounting Standard 1) outlines the definition of current liabilities as obligations expected to be settled within the entity's operating cycle.
• The typical operating cycle for many entities is considered to be one year, but this can vary depending on the industry.

Analysis and Detail

1. The term "operating cycle" refers to the time it takes for an entity to purchase inventory, sell it, and collect cash from the customers.
2. Current liabilities are those obligations that are due within this cycle.

Verify and Summarize

• Among the options provided:
  • a. 6-months - Not universally applicable, as operating cycles can vary.
  • b. normal - This is a general term but not specific enough.
  • c. 3-months - Again, not universally applicable.
  • d. abnormal - Does not align with the concept of an operating cycle.

The correct answer would typically be “normal," as it is the most fitting within the context of IAS 1, which refers to the standard timeframe for current liabilities.

Final Answer

b. normal