The following items appear on the balance sheet of a company with a

twelve-month operating cycle. Identify the proper classification of

each item as follows: C if it is a current liability, L if it is a

long-term liability, or N if it is not a liability.

1. Salaries payable.

2. Current portion of long-term debt.

Question

Mathematics

Bear

11 November, 18:44

The following items appear on the balance sheet of a company with a

twelve-month operating cycle. Identify the proper classification of

each item as follows: C if it is a current liability, L if it is a

long-term liability, or N if it is not a liability.

1. Salaries payable.

2. Current portion of long-term debt.

+5

Answers (1)

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Collier · Answer 1

Answer: 1. C, 2. C

Step-by-step explanation:

Salaries payable is C (a Current Liability) This is so because the company owes salaries to its workers which were left unpaid as at the end of the year. This amount is reported on the balance sheet as one of the company's current liabilities.

2. Current portion of a long term debt is C (a current liability) This is so because the amount of the loan principal that will be due within one year of the date of the balance sheet is yet to be paid. This amount is reported on the balance sheet as one of the company's current liabilities.