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Please only choose the correct answe

Please only choose the correct answe

FINANCIAL ACCOUNTING
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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Hi! Please only choose the correct answer. see the pictures attached

Statement I- A long-term debt that is due to be settled within twelve months after the end of the reporting period is classified as noncurrent when an agreement to refinance or reschedule payment on a long-term basis is completed after the end of the reporting period and before the financial statements are authorized for issue Statement II - When an entity breaches a covenant under a long-term loan agreement on or before the end of the reporting period with the effect that the liability becomes payable on demand, the liability is classified noncurrent when the lender agreed on or before the end of reporting period to provide a grace period at least twelve months after that date a. Only statement I is correct b. Only statement Il is correct c. Both statements are correct d. Both statements are incorrect
Transcribed Image Text:Statement I- A long-term debt that is due to be settled within twelve months after the end of the reporting period is classified as noncurrent when an agreement to refinance or reschedule payment on a long-term basis is completed after the end of the reporting period and before the financial statements are authorized for issue Statement II - When an entity breaches a covenant under a long-term loan agreement on or before the end of the reporting period with the effect that the liability becomes payable on demand, the liability is classified noncurrent when the lender agreed on or before the end of reporting period to provide a grace period at least twelve months after that date a. Only statement I is correct b. Only statement Il is correct c. Both statements are correct d. Both statements are incorrect
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