Identify the Classifications of the Following Accounts as Either Current

question 129

Multiple Choice

Identify the classifications of the following accounts as either current or long-term liabilities for the December 31, 2016 balance sheet.
-An amount of money owed for years 2018 to 2022 to a creditor as annual installment payments on a ten-year note, due June 30, 2022.

• A)Current liability
• B)Long-term liability

---

Definitions:

Constructive Trust

An equitable remedy resembling a trust, imposed by a court in order to benefit a party that has been unjustly enriched at another's expense, even though no actual trust has been created by the parties.

Legal Title

The formal right of ownership of property, recognized and protected by law, which may not necessarily entail the possession or use of the property.

Resulting Trust

A trust law concept that arises when one person holds the title to property under circumstances suggesting that he or she should not enjoy the full beneficial interest in the property.

Living Trust

A legal document that allows an individual to control their assets during their lifetime and distribute the remaining assets after death without the need for probate.