On the Balance Sheet the Current Portion of Long-Term Debt

question 1

Multiple Choice

On the balance sheet the current portion of long-term debt should:

• A) be paid immediately.
• B) be reclassified as a current liability.
• C) be classified as a long-term liability.
• D) not be separated from the long-term portion of debt.

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Definitions:

Equivalent Units of Production

A concept in cost accounting used to allocate production costs to units produced, accounting for partially completed units by converting them into an equivalent number of fully completed units.

Conversion Costs

The combined costs of direct labor and manufacturing overhead involved in converting raw materials into finished products.

Weighted-Average Method

A cost accounting method that assigns an average cost to each unit of inventory by weighting the costs of similar items.

Work in Process Inventory

The cost of partially finished goods that are still in the production process at the end of an accounting period.