Obligations of the entity that do not require payment within one year of the balance sheet date are classified as:
A) current liabilities.
B) non-current assets.
C) current obligations.
D) non-current liabilities.

Question

Quizplus · Accepted Answer

Obligations of the entity that do not require payment within one year of the balance sheet date are classified as non-current liabilities. This is because they do not need to be paid in the short-term, but rather over a longer period of time. Current liabilities require payment within one year, so they are not the appropriate classification. Non-current assets and current obligations do not refer to obligations that require payment, so they are also not the appropriate classification.

Obligations of the Entity That Do Not Require Payment Within