A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business. A liability can be short term or long term depending upon the time period in which it is required to be paid. If a liability is required to be paid with in a period of 12 months i.e. one year it will be treated as current liability and if a liability is required to be paid beyond a period of 12 months or one operating cycle, it will be treated as long term liability. Difference between a current and long-term liability

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 11, Problem 1DQ

To determine

Concept Introduction:

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A liability can be short term or long term depending upon the time period in which it is required to be paid. If a liability is required to be paid with in a period of 12 months i.e. one year it will be treated as current liability and if a liability is required to be paid beyond a period of 12 months or one operating cycle, it will be treated as long term liability.

Difference between a current and long-term liability

Expert Solution & Answer

Explanation of Solution

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A current liability can be defined as the liability that is required to be paid within a period of 12 months or one operating cycle. Example accounts payable, short term notes payable.

While a long term liability can be defined as the liability that is required to be paid in a period of more than 12 months or one year or one operating cycle. Example − Bonds issued for 5 years, loan taken from bank to be paid in 3 years etc.

The difference between a current and long-term liability can be elaborated as under −

Basis	Current Liability	Long-term Liability
Time period	It is required to be paid with a period of 12 months or one operating cycle of the balance sheet.	It is required to be paid beyond a period of 12 months or one operating cycle of the balance sheet.
Examples	Example are accounts payable, notes payable, wages and salaries, interest, dividends, short term loans etc.	Examples are leases, bonds issued for more than one year, pension obligations, deferred taxes, bank loans etc.
Recording in the balance sheet	Recorded in the balance according to the occurrence of their due dates in the current liability section.	They are recorded in a separate section under the head long-term liabilities in the balance sheet.

Thus, it can be concluded that, the main difference between current and long term liability is that a current liability is required to be paid within a period of 12 months while, a long term liability is required to be paid beyond a period of 12 months.

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Students have asked these similar questions

The Dortmund Company uses the weighted-average method in its process costing system. The company's ending work in process inventory consists of 18,500 units. The ending work in process inventory is 100% complete with respect to materials and 60% complete with respect to labor and overhead. If the costs per equivalent unit for the period are $5.20 for materials and $4.10 for labor and overhead, what would be the balance of the ending work in process inventory account? (Do not round cost per equivalent unit) A. $142,265 B. $96,200 C. $141,710 D. $106,745

Given the following information how much raw material was transferred to work in progress on March 31? Inventory on March 1 is $420,000, raw materials purchased in March are $780,000, and raw materials inventory on March 31 is $310,000. A: $890,000 B: $940,000 C: $750,000 D: $1,040,000

Can you help me solve this financial accounting question using valid financial accounting techniques?

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 11, Problem 1DQ

To determine

Concept Introduction:

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A liability can be short term or long term depending upon the time period in which it is required to be paid. If a liability is required to be paid with in a period of 12 months i.e. one year it will be treated as current liability and if a liability is required to be paid beyond a period of 12 months or one operating cycle, it will be treated as long term liability.

Difference between a current and long-term liability

Expert Solution & Answer

Explanation of Solution

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A current liability can be defined as the liability that is required to be paid within a period of 12 months or one operating cycle. Example accounts payable, short term notes payable.

While a long term liability can be defined as the liability that is required to be paid in a period of more than 12 months or one year or one operating cycle. Example − Bonds issued for 5 years, loan taken from bank to be paid in 3 years etc.

The difference between a current and long-term liability can be elaborated as under −

Basis	Current Liability	Long-term Liability
Time period	It is required to be paid with a period of 12 months or one operating cycle of the balance sheet.	It is required to be paid beyond a period of 12 months or one operating cycle of the balance sheet.
Examples	Example are accounts payable, notes payable, wages and salaries, interest, dividends, short term loans etc.	Examples are leases, bonds issued for more than one year, pension obligations, deferred taxes, bank loans etc.
Recording in the balance sheet	Recorded in the balance according to the occurrence of their due dates in the current liability section.	They are recorded in a separate section under the head long-term liabilities in the balance sheet.

Thus, it can be concluded that, the main difference between current and long term liability is that a current liability is required to be paid within a period of 12 months while, a long term liability is required to be paid beyond a period of 12 months.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 11, Problem 1DQ

To determine

Concept Introduction:

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A liability can be short term or long term depending upon the time period in which it is required to be paid. If a liability is required to be paid with in a period of 12 months i.e. one year it will be treated as current liability and if a liability is required to be paid beyond a period of 12 months or one operating cycle, it will be treated as long term liability.

Difference between a current and long-term liability

Expert Solution & Answer

Explanation of Solution

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A current liability can be defined as the liability that is required to be paid within a period of 12 months or one operating cycle. Example accounts payable, short term notes payable.

While a long term liability can be defined as the liability that is required to be paid in a period of more than 12 months or one year or one operating cycle. Example − Bonds issued for 5 years, loan taken from bank to be paid in 3 years etc.

The difference between a current and long-term liability can be elaborated as under −

Basis	Current Liability	Long-term Liability
Time period	It is required to be paid with a period of 12 months or one operating cycle of the balance sheet.	It is required to be paid beyond a period of 12 months or one operating cycle of the balance sheet.
Examples	Example are accounts payable, notes payable, wages and salaries, interest, dividends, short term loans etc.	Examples are leases, bonds issued for more than one year, pension obligations, deferred taxes, bank loans etc.
Recording in the balance sheet	Recorded in the balance according to the occurrence of their due dates in the current liability section.	They are recorded in a separate section under the head long-term liabilities in the balance sheet.

Thus, it can be concluded that, the main difference between current and long term liability is that a current liability is required to be paid within a period of 12 months while, a long term liability is required to be paid beyond a period of 12 months.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 11, Problem 1DQ

To determine

Concept Introduction:

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A liability can be short term or long term depending upon the time period in which it is required to be paid. If a liability is required to be paid with in a period of 12 months i.e. one year it will be treated as current liability and if a liability is required to be paid beyond a period of 12 months or one operating cycle, it will be treated as long term liability.

Difference between a current and long-term liability

Expert Solution & Answer

Explanation of Solution

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A current liability can be defined as the liability that is required to be paid within a period of 12 months or one operating cycle. Example accounts payable, short term notes payable.

While a long term liability can be defined as the liability that is required to be paid in a period of more than 12 months or one year or one operating cycle. Example − Bonds issued for 5 years, loan taken from bank to be paid in 3 years etc.

The difference between a current and long-term liability can be elaborated as under −

Basis	Current Liability	Long-term Liability
Time period	It is required to be paid with a period of 12 months or one operating cycle of the balance sheet.	It is required to be paid beyond a period of 12 months or one operating cycle of the balance sheet.
Examples	Example are accounts payable, notes payable, wages and salaries, interest, dividends, short term loans etc.	Examples are leases, bonds issued for more than one year, pension obligations, deferred taxes, bank loans etc.
Recording in the balance sheet	Recorded in the balance according to the occurrence of their due dates in the current liability section.	They are recorded in a separate section under the head long-term liabilities in the balance sheet.

Thus, it can be concluded that, the main difference between current and long term liability is that a current liability is required to be paid within a period of 12 months while, a long term liability is required to be paid beyond a period of 12 months.

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Answer 5

Chapter 11, Problem 1DQ

To determine

Concept Introduction:

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A liability can be short term or long term depending upon the time period in which it is required to be paid. If a liability is required to be paid with in a period of 12 months i.e. one year it will be treated as current liability and if a liability is required to be paid beyond a period of 12 months or one operating cycle, it will be treated as long term liability.

Difference between a current and long-term liability

Expert Solution & Answer

Explanation of Solution

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A current liability can be defined as the liability that is required to be paid within a period of 12 months or one operating cycle. Example accounts payable, short term notes payable.

While a long term liability can be defined as the liability that is required to be paid in a period of more than 12 months or one year or one operating cycle. Example − Bonds issued for 5 years, loan taken from bank to be paid in 3 years etc.

The difference between a current and long-term liability can be elaborated as under −

Basis	Current Liability	Long-term Liability
Time period	It is required to be paid with a period of 12 months or one operating cycle of the balance sheet.	It is required to be paid beyond a period of 12 months or one operating cycle of the balance sheet.
Examples	Example are accounts payable, notes payable, wages and salaries, interest, dividends, short term loans etc.	Examples are leases, bonds issued for more than one year, pension obligations, deferred taxes, bank loans etc.
Recording in the balance sheet	Recorded in the balance according to the occurrence of their due dates in the current liability section.	They are recorded in a separate section under the head long-term liabilities in the balance sheet.

Thus, it can be concluded that, the main difference between current and long term liability is that a current liability is required to be paid within a period of 12 months while, a long term liability is required to be paid beyond a period of 12 months.

Answer 6

Chapter 11, Problem 1DQ

To determine

Concept Introduction:

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A liability can be short term or long term depending upon the time period in which it is required to be paid. If a liability is required to be paid with in a period of 12 months i.e. one year it will be treated as current liability and if a liability is required to be paid beyond a period of 12 months or one operating cycle, it will be treated as long term liability.

Difference between a current and long-term liability

Expert Solution & Answer

Explanation of Solution

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A current liability can be defined as the liability that is required to be paid within a period of 12 months or one operating cycle. Example accounts payable, short term notes payable.

While a long term liability can be defined as the liability that is required to be paid in a period of more than 12 months or one year or one operating cycle. Example − Bonds issued for 5 years, loan taken from bank to be paid in 3 years etc.

The difference between a current and long-term liability can be elaborated as under −

Basis	Current Liability	Long-term Liability
Time period	It is required to be paid with a period of 12 months or one operating cycle of the balance sheet.	It is required to be paid beyond a period of 12 months or one operating cycle of the balance sheet.
Examples	Example are accounts payable, notes payable, wages and salaries, interest, dividends, short term loans etc.	Examples are leases, bonds issued for more than one year, pension obligations, deferred taxes, bank loans etc.
Recording in the balance sheet	Recorded in the balance according to the occurrence of their due dates in the current liability section.	They are recorded in a separate section under the head long-term liabilities in the balance sheet.

Thus, it can be concluded that, the main difference between current and long term liability is that a current liability is required to be paid within a period of 12 months while, a long term liability is required to be paid beyond a period of 12 months.

Answer 7

Chapter 11, Problem 1DQ

To determine

Concept Introduction:

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A liability can be short term or long term depending upon the time period in which it is required to be paid. If a liability is required to be paid with in a period of 12 months i.e. one year it will be treated as current liability and if a liability is required to be paid beyond a period of 12 months or one operating cycle, it will be treated as long term liability.

Difference between a current and long-term liability

Answer 8

Expert Solution & Answer

Explanation of Solution

A liability can be defined as an obligation which a person or a company needs to pay which arises during the course of the business.

A current liability can be defined as the liability that is required to be paid within a period of 12 months or one operating cycle. Example accounts payable, short term notes payable.

While a long term liability can be defined as the liability that is required to be paid in a period of more than 12 months or one year or one operating cycle. Example − Bonds issued for 5 years, loan taken from bank to be paid in 3 years etc.

The difference between a current and long-term liability can be elaborated as under −

Basis	Current Liability	Long-term Liability
Time period	It is required to be paid with a period of 12 months or one operating cycle of the balance sheet.	It is required to be paid beyond a period of 12 months or one operating cycle of the balance sheet.
Examples	Example are accounts payable, notes payable, wages and salaries, interest, dividends, short term loans etc.	Examples are leases, bonds issued for more than one year, pension obligations, deferred taxes, bank loans etc.
Recording in the balance sheet	Recorded in the balance according to the occurrence of their due dates in the current liability section.	They are recorded in a separate section under the head long-term liabilities in the balance sheet.

Thus, it can be concluded that, the main difference between current and long term liability is that a current liability is required to be paid within a period of 12 months while, a long term liability is required to be paid beyond a period of 12 months.