source : yahoo.com
Which of the following would most likely be classified as a current liability?
Well, Tom is not quite right. Unearned rent is where the tenant pays you rent in advance. If they move out, you have to pay the rent (that you have not yet earned) back to them. So, you have the cash, but until the requisite amount of time passes, you still have a contingent obligation to pay it back. Hey, that sounds a little like a short term loan – you get the cash, but you have to pay it back.
So they are both liabilities.
So what is the difference between a short term liability and a long term liability?
WELL, Short term means you will have to pay it back in less than a year.
Hmmm…..rent prepayments usually get earned in a month or 2. That would qualify as less than a year. When you issue bonds, they usually have repayment terms of 10 years or more.
So…..which one of those 2 sound like they might be CURRENT liabilities?
Which of the following would most likely be classified as a current… – You may also like: Which method most always produces the most depreciation in the first year? Notify me of follow-up comments by email.So they are both liabilities. So what is the difference between a short term liability and a long term liability? When you issue bonds, they usually have repayment terms of 10 years or more. So…..which one of those 2 sound like they might be CURRENT liabilities?Current liabilities, including debt-service payments on long-term liabilities, can quickly consume more cash than a company generates. The reason that current and long-term liabilities are treated differently, is because of the immediate need a company has for cash.
Which of the following would most likely be classified as a current… – An analyst should most likely be suspicious of the new transaction if Which of the following is an independent auditor least likely to do with respect to a company's financial statements? Which of the following is least likely a qualitative characteristic accounting information must possess in order…More. Select Country – All – Algeria Bahrain Dubai Egypt India Iraq Jordan Kuwait Lebanon Libya Morocco Oman Pakistan Qatar Saudi Arabia Tunisia UAE Answer added by Mohammad Mahabubur Rahman, CSCM™, Head Of The Department , Global Freight Ltd. 5 years ago. Answer will be D. An…Bonds payable, due in 20 years would most likely be listed last on a statement of financial position. Notes payable is also a long-term liability but has a shorter maturity when compared with bonds Income tax payable is a current liability. Therefore,it would be listed before bonds payable, due in 20…
Current Vs. Long-Term Liabilities | Most Popular – Current liabilities can also be settled by creating a new current liability, such as a new short-term debt Below is a list of the most common current liabilities that are found on the balance sheet Depending on the nature of the received benefit, the company's accountants classify it as either an…A. Two-year Notes Payable B. Bonds Payable C. Mortgage Payable D. Unearne Rent 2- All Long-term Liabilities Eventually Become Current Liabilities A- TRUE B- FALSE.Liabilities can be classified in to fixed liabilities and current liabilities. Fixed Liabilities are those liabilities which will be redeemed after a long Current Liabilities are those liabilities which have to be redeemed in the near future, usually within a year. Trade creditors, short term loans, bills payable…