Which of the Following Is Not a Condition Necessary to Exclude

question 72

Multiple Choice

Which of the following is not a condition necessary to exclude a short-term obligation from current liabilities?

• A)Intend to refinance the obligation on a long-term basis.
• B)Obligation must be due within one year.
• C)Unconditional right to defer settlement of the liability for at least 12 months.
• D)Subsequently refinance the obligation on a long-term basis.

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Definitions:

Banking Day

A banking day is any day that a bank is open to the public for business. Generally, a banking business transacted after this time is usually considered to be the next day’s business. Saturdays, Sundays, and federal holidays are usually not considered banking days.

SUTA Limit

The maximum amount of earnings on which an employer is required to pay State Unemployment Tax Act taxes.

Wages Payable

An accounting term for the amount owed to employees for work performed that has not yet been paid.

Cash

Liquid currency and coins, along with items of immediate bankability like checks, bank drafts, and money orders, considered a highly liquid asset.