Why are liabilities separated into current and long-term?
A)Users want to know which amounts will be paid using current assets.
B)Because current and long-term classifications are just common sense.
C)This format helps a company determine how much profit was made.
D)The SEC requires companies to do so.

Question

Quizplus · Accepted Answer

Separating liabilities into current and long-term allows users to understand which amounts will be paid using current assets, which is important for assessing a company's liquidity and ability to meet short-term obligations.

Why Are Liabilities Separated into Current and Long-Term