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What affect is there if a current liability is classified as a long-term liability? How about...

What affect is there if a current liability is classified as a long-term liability? How about the other way around?

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  • What if current liability is classified as long term liability?
    >Current liability would be understated in Balance Sheet.
    >Long Term Liabilities would be overstated in Balance Sheet.
    >Current Ratio (Current asset / Current Liabilities) would be overstated.
    >Debt to Equity ratio would be overstated.
  • What if long term liability gets classified as current liability?
    >Current liability would be overstated in Balance Sheet.
    >Long Term Liabilities would be understated in Balance Sheet.
    >Current Ratio (Current asset / Current Liabilities) would be understated
    >Debt to Equity ratio would be understated.
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