Asked by Andrea Barisic on Jul 03, 2024
Verified
Which of the following statements is true?
A) If any portion of a non-current liability is to be paid in the next year, the entire debt should be classified as a current liability.
B) "Current maturities of non-current debt" refers to the amount of interest on notes payable that must be paid in the current year.
C) Even though current and non-current debt must be shown separately on the statement of financial position, it is not necessary to prepare a journal entry to recognize this.
D) A non- current liability is an obligation that is expected to be paid within one year.
Non-current Liability
A financial obligation that is not due for settlement within one year or the normal operating cycle of the business, often including long-term loans, bonds payable, and lease obligations.
Current Liability
Financial obligations that a company is required to pay within one year or within its normal operating cycle.
Current Maturities
The portion of a company's long-term debt that is due to be paid within the upcoming year.
- Classify and describe the characteristics and classifications of current and non-current liabilities.
Verified Answer
Learning Objectives
- Classify and describe the characteristics and classifications of current and non-current liabilities.
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