From page 8-1 of the VLN, what makes aliability a current liability?O It matures more than a year, or theoperating cycle, whichever is longer.O It will be paid with a long term asset.O It will come due within a year of thebalance sheet date.O All of the answers describe what makes aliability current. PART A: CURRENT LIABILITIESLiabilities1) Probable future sacrifices of economic benefits2) Arising from present obligations to other entities3) As a result of past transactions or eventsCurrent liabilities are short-term obligations that will be paidwithin the current operating cycle or one year, whichever islonger (normally one year). Current liabilities are recorded atface value because the time to maturity is short.Non-current liabilities include all other liabilities that are notcurrent liabilities. Non-current liabilities are recorded at theircash equivalent amount (present value).Cash equivalent- (the cash amount that the creditor wouldaccept to settle the liability today)-Does not include interest until interest has accruedOrder of Liabilities on Balance Sheet-Current Liabilities go first, then-Long term (non-current) LiabilitiesCURRENT LIABILITIESNotes Payable (could be current or non-current)-Evidenced by a contract-Includes interestInterest Calculation (Revisited...again)Px R x TP = Principal (FACE Value) is the amount borrowedR = Annual interest rateT = length of time the money was used this accounting period(fraction of year).

Current liabilities are the liabilities that needs to be settle in cash within a Financial year.…

From page 8-1 of the VLN, what makes a liability a current liability? O It matures more than a year, or the operating cycle, whichever is longer. O It will be paid with a long term asset. O It will come due within a year of the balance sheet date.

From page 8-1 of the VLN, what makes a liability a current liability? O It matures more than a year, or the operating cycle, whichever is longer. O It will be paid with a long term asset. O It will come due within a year of the balance sheet date.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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