Question

ctive 1 S11-1 Determining current versus long-term liabilities Rios Raft Company had the following liabilities. a. Accounts Payable d. Note Payable due in 6 months b. Note Payable due in 3 years e. Sales Tax Payable c. Salaries Payable f. Unearned Revenue due in 8 month Determine whether each liability would be considered a current liability (CL) long-term liability (LTL).

Answer 1

SI-1 current liabilities are those liabilities that need to be paid within a year Long term liabilities are those debts that are due beyond a year a) It is a current liability which denotes amount due to suppliers to be paid within a year. b) It is considered as long term liability as the amount falls due after completion of 3 years c) It is a current liability to the company d) It falis under current liability as the amount is to be paid after completion of 6 months ie less than a year e) It is considered as a current liability as the tax liability is to be paid within a year f) It is treated as current liability to the company. unearned Revenue is the amount received from customer for the work which is yet to perform. 50, it is considered as current liability