Short-Term Debt Expected to Be Refinanced

question 34

Multiple Choice

Short-term debt expected to be refinanced

• A)may be classified as long term if both the intent to refinance and the ability to refinance exist
• B)must always be reported as a current liability
• C)may be classified as long term if off-balance-sheet financing has been obtained
• D)may be classified as long term if there is an intent to refinance

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Definitions:

Accounts Payable

Liabilities owed by a company to its suppliers or creditors for goods and services received that have not yet been paid for.

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Permanent Account

An account in the general ledger that carries its ending balance over to the next accounting period, such as assets, liabilities, and equity accounts.

Balance Sheet Accounts

Accounts that appear on the balance sheet, representing the company's assets, liabilities, and shareholders' equity at a specific point in time.