Current Maturities of Long-Term Debt

question 96

Multiple Choice

Current maturities of long-term debt

• A) require an adjusting entry.
• B) are optionally reported on the balance sheet.
• C) can be properly classified during balance sheet preparation with no adjusting entry required.
• D) are not considered to be current liabilities.

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Definitions:

Firm's Operations

The day-to-day activities involved in running a business, including production, marketing, and sales functions.

Pledging Accounts Receivable

Using accounts receivable as collateral to secure a loan.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.

Recourse

In secured lending, if the asset collateralizing a loan proves not to have the value anticipated, recourse implies the borrower is still responsible for the debt. The lender is said to have recourse to the borrower.