Question

SKieso, Intermediate Accounting, 11e FINANCIAL ACCOUNTING THEORY AND POL (RIM221) racticee Gradebook ORION nment MESSAGE MY INSTRUCTOR «BACKERE FULL SCREEN PRINTERVERSİON Practice Question 2 Jackson Corporation has borrowed $2 milion from a local bank under a long term debt agreement whereby the loan has to be repaid in two years' time. The agreement was violated and the debt became payable on demand. As a result, the loan was reported as a current kability in Jackson's statement of financial position (SFP), Prior to the release of the statement, the bank agreed that it would not demand repayment. Assuming Jackson reports under IFRS, the loan would continue to be shown as a current liability in the SFP could be reclassified from a current liability to a long-term iability 0 could be redassified from a current liability to equity O would have to be repaid prior to the release of the SFP Question Attenmpts: 0 of 1 used SAVE FOR LATER SUBMIT ANSWER

Answer 1

answer is option A

a) would continue to be shown as a current liability in the SFP

now, the loan is payable on demand. it means it can be demanded any time and jackson needs to ready with current assets to clear this obligation and thus it will be always stated as current liability in the SFP, till it is repaid.