Which of the following statements is true?
A)If any portion of a non-current liability is to be paid in the next year, the entire debt should be classified as a current liability.
B)"Current maturities of non-current debt" refers to the amount of interest on notes payable that must be paid in the current year.
C)Even though current and non-current debt must be shown separately on the statement of financial position, it is not necessary to prepare a journal entry to recognize this.
D)A non- current liability is an obligation that is expected to be paid within one year.

Question

Quizplus · Accepted Answer

Option C is correct because it accurately reflects accounting practices. Current and non-current debts are indeed shown separately on the statement of financial position (balance sheet), but the classification does not require a specific journal entry. The classification is based on the nature and timing of the liabilities, not on individual journal entries.

Which of the Following Statements Is True