Question

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?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
  • 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.
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What is a current liability? Distinguish between a current liability and a long term debt.
What is a current liability? Distinguish between a current liability and a long term debt.
Assets and liabilties are classified as long term or short term and separated on the balance...
Assets and liabilties are classified as long term or short term and separated on the balance sheet. How do we know if an asset or liability needs to classified as short term? Can you provide an example of a business that might have an operating cycle of longer than one year?
Current Portion of Long-Term Debt Connie's Bistro, Inc., reported the following information about its long-term debt...
Current Portion of Long-Term Debt Connie's Bistro, Inc., reported the following information about its long-term debt in the notes to a recent financial statement: Long-term debt is comprised of the following: December 31 Current Year Preceding Year Total long term-debt $377,900 $207,800 Less current portion (109,600) (102,000) Long-term debt $268,300 $105,800 a. How much of the long-term debt was disclosed as a current liability on the current year’s December 31 balance sheet? $ b. How much did the total current...
The usual order for the asset subgroups of a classified balance sheet is: Long-term investments, current...
The usual order for the asset subgroups of a classified balance sheet is: Long-term investments, current assets, plant assets, intangible assets. Intangible assets, current assets, long-term investments, plant assets. Current assets, prepaid expenses, long-term investments, intangible assets. Plant assets, intangible assets, long-term investments, current assets. Current assets, long-term investments, plant assets, intangible assets.
5- The current retio measures a firm's a) Profitability b) Ability to pay long--term liability c)...
5- The current retio measures a firm's a) Profitability b) Ability to pay long--term liability c) Ability to pay shot-trem liability d) a,b and c 6- Which of the follwoing woulf NOT be classified as long-term asset? a) Equipment b) Accounts Payable c) Automobiles d) Building 7- What is the going concern assumption? a) Assumes that a company will go thae distance for their customers. b) Assumes company will go out of business for ten years c) Assumes that a...
Contingent Liabilities are not classified as Current Liability * True or False
Contingent Liabilities are not classified as Current Liability * True or False
Discuss how the aging population will affect the current long-term care system over the next two...
Discuss how the aging population will affect the current long-term care system over the next two decades. How can healthcare administrators prepare for these changes? Be specific and provide detailed examples to support your major points.
How does the operating cycle affect the classification of assets and liabilitites as current or long...
How does the operating cycle affect the classification of assets and liabilitites as current or long term? Please explain.
Which of the following represents a current liability? A. Income tax expense B. Long-term loan C....
Which of the following represents a current liability? A. Income tax expense B. Long-term loan C. Short-term notes D. Bond issue E. None of the above
A company has $300,000 of 20-year bonds payable, which mature in the current year. How are...
A company has $300,000 of 20-year bonds payable, which mature in the current year. How are these liabilities classified on the company's balance sheet? a.$300,000 is reported as long term liability. b.$300,000 is reported as current liability. c.$150,000 is reported as current liability. d.$150,000 is reported as long term liability.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT