The current portion of long-term debt should a.be reclassified as a current liability b.be paid immediately c.not be separated from the long-term portion of debt d.be classified as a long-term liability

The current portion of long-term debt should a.be reclassified as a current liability b.be paid immediately c.not be separated from the long-term portion of debt d.be classified as a long-term liability

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 13GI

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

The current portion of long-term debt should

a.be reclassified as a current liability

b.be paid immediately

c.not be separated from the long-term portion of debt

d.be classified as a long-term liability

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