On 1 July 2016,Avery Services Issued a Long-Term Note Payable

question 57

Multiple Choice

On 1 July 2016,Avery Services issued a long-term note payable for $10 000.It is payable over a five year term in $2 000 instalments on 1 July of each succeeding year.When the note was issued,the principal amount was recorded in long-term notes payable and a second entry was made to reclassify the current portion.How will this information be shown on the balance sheet dated 31 December 2016?

• A)$2 000 shown as current liability;$8 000 shown as non-current liability
• B)$2 000 shown as current liability;$10 000 shown as non-current liability
• C)The entire $10 000 shown as non-current liability
• D)$10 000 shown as current liability only

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Definitions:

Empowerment

A management practice of sharing information, rewards, and power with employees so that they can take initiative and make decisions to solve problems and improve service and performance.

Flexibility

The ability to adapt, change or be modified to suit new conditions or situations.

Selection Method

The process or technique used by organizations to choose the most suitable candidates from a pool of applicants.

Psychological Testing

The use of formal tests to evaluate an individual's mental functions and behaviors, often used in the hiring process to assess potential employees.