If a payment of principal is due in 13 months on a long-term liability,that payment will now appear on the balance sheet as:
A) a current liability.
B) long-term debt.
C) cash.
D) interest expense.

Question

Quizplus · Accepted Answer

A payment due in 13 months would not be considered a current liability as it is not due within the current accounting period (which is usually one year). Instead, it would be classified as long-term debt. Option C (cash) and D (interest expense) are not appropriate as the payment has not yet been made and does not involve any interest expense.

If a Payment of Principal Is Due in 13 Months