The Current Portion of Long-Term Debt Should Be

question 115

Multiple Choice

The current portion of long-term debt should be

• A)Reported as a current liability on the balance sheet.
• B)Reported as a long-term liability on the balance sheet.
• C)Combined with the rest of the long-term debt on the balance sheet.

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Definitions:

Consolidation

The process of combining financial statements of a parent company with its subsidiaries to present as if the group of companies is a single economic entity.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for a long-term asset since its acquisition.

Consolidation Purposes

The process of combining the financial statements of a parent company and its subsidiaries into one comprehensive financial statement package, to present as if the group were a single entity.

Excess Amortizations

The amount by which amortization expense exceeds the amount necessary to amortize the cost of a tangible or intangible asset over its useful life.