Which of the following situations would not require that long-term liabilities be reported as current liabilities on a classified balance sheet?
A) The long-term debt is callable by the creditor.
B) The creditor has the right to demand payment due to a contractual violation.
C) The long-term debt matures within the upcoming year.
D) The company intended to refinance the debt and did so prior to issuance of the financial statements.

Question

Quizplus · Accepted Answer

If a company refinances a long-term debt and does so prior to the issuance of the financial statements, the debt would not need to be reported as a current liability because it is no longer due within the upcoming year. Therefore, choice D is the correct answer. The other choices involve situations in which the long-term debt could potentially become due within the upcoming year and would need to be reported as a current liability.

Which of the Following Situations Would Not Require That Long-Term