Which of the following statements is incorrect?
A)The currently maturing portion of long-term debt must be classified as a current liability.
B)The non-current portion of long-term debt will be correctly reported as a long-term liability.
C)When a company plans to refinance the currently maturing debt on a long-term basis,and has the ability to do so,it may report the currently maturing debt as a long-term liability.
D)The currently maturing portion of long-term debt is a current liability if it is due within one year from the date of the balance sheet,or within the operating cycle,whichever is longer.

Question

Quizplus · Accepted Answer

This statement is incorrect as even if a company plans to refinance their currently maturing debt on a long-term basis, it must still classify the portion of debt that is due within the next year as a current liability. The decision to classify the debt as long-term depends on the ability to refinance, not the intention to do so.

Which of the Following Statements Is Incorrect