The current portion of long-term debt should
A)
Be classified as a long-term liability
B)
Not be separated from the long-term portion of debt
C)
Be paid immediately
D)
Be reclassified as a current liability

Question

Quizplus · Accepted Answer

The current portion of long-term debt represents the portion of the loan that must be paid within the next year, therefore it should be reclassified as a current liability on the balance sheet. This separation is important to provide a clear picture of the company's liquidity and ability to meet its short-term obligations.

The Current Portion of Long-Term Debt Should