Distinguish Between Current Liabilities and Long-Term Liabilities

question 7

Essay

Distinguish between current liabilities and long-term liabilities.

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Definitions:

Inventory

Materials and goods a business holds for the ultimate goal of resale or processing in the manufacturing process.

Purchase

Acquiring goods or services in exchange for money or other compensation.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made for accruals, deferrals, and estimated items.

Adjusting Journal Entries

Entries made at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.