Which of the following statements concerning current liabilities is incorrect?

A) Current liabilities include unearned revenues.
B) A company that has more current liabilities than current assets is usually the subject of some concern.
C) Current liabilities include prepaid expenses.
D) A current liability is a debt that can reasonably be expected to be paid out of existing current assets or result in the creation of other current liabilities.

Prepaid expenses are considered assets, not liabilities. Current liabilities include obligations that are due within one year or within the normal operating cycle of a business, whichever is longer. This includes unearned revenues, which are payments received in advance for goods or services that have not yet been delivered or performed. A company that has more current liabilities than current assets may struggle to meet its short-term obligations and may face financial difficulties. The definition of a current liability specifies that it must be payable out of existing current assets or result in the creation of other current liabilities, meaning that it is a short-term obligation that is expected to be resolved within a relatively short time period.