Identify the classifications of the following accounts as either current or long-term liabilities for the December 31, 2016 balance sheet.
-An amount of money owed to a supplier based on the terms 2/20, n/40, for which no note was executed.
A)Current liability
B)Long-term liability

Question

Quizplus · Accepted Answer

The terms 2/20, n/40 suggest that the amount owed is a trade payable, which is a type of current liability. The fact that no note was executed does not change its classification.

Identify the Classifications of the Following Accounts as Either Current