Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 2 - A Further Look at Financial Statements - Questions: 4

Answer

"Current liabilities" need to be paid back to creditors within one year (ex. Accounts Payable). "Long-term liabilities" must be paid back after 1 year (ex. Mortgage Loan). Both current and long-term liabilities appear in the balance sheet in the Liabilities Section.

Work Step by Step

Current Liability examples: Accounts Payable, Wages payable, Short-term loan. Long-term Liability examples: Mortgage loan, Long-term loan.
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