Debts That Are to Be Repaid in Two Years Are

question 63

Multiple Choice

Debts that are to be repaid in two years are referred to as

• A) expenses.
• B) current assets.
• C) long-term liabilities.
• D) fixed assets.
• E) current liabilities.

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Definitions:

Aging Process

A method used in accounting to categorize accounts receivable according to the length of time an invoice has been outstanding.

Accounts Receivable

Funds that are expected to be received by a company from its customers who have purchased goods or services on credit, essentially representing a line of credit extended by the business and recorded as an asset.

Income Statement Approach

The Income Statement Approach is a method used in accounting to create the income statement by focusing on revenues, expenses, and income to determine the net profit or loss for a period.

Direct Write Off Method

A method to account for bad debts by directly writing off specific invoices determined to be uncollectible.