Identify which of the following transactions would be classified as a current liability and which would be
Question:
(a) A bank loan payable due in two years, with principal due at maturity and interest due the first of each month
(b) Cash received in advance by Air Canada for airline tickets
(c) HST collected on sales
(d) Unused amount of operating line of credit
(e) Provision relating to a lawsuit settlement expected to be paid next month
(f) Obligations due under operating leases
(g) Bonds payable, due in 10 years
(h) Payroll deductions withheld from the employees' weekly pay
(i) Prepaid property tax
(j) A $75,000 mortgage payable, of which $5,000 is due in the next year
Line of Credit
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
a Noncurrent liability b Current liability c Current liability d Neither no balance is outst...View the full answer
Answered By
Umber Talat
I am providing full time mentoring and tutoring services in Business Finance, Contemporary issue in Global Economy, Quantitative Techniques, Principles of Marketing, strategic marketing, International Marketing, Organizational Behavior (OB), Consumer Behavior, Sales Force Management, Strategic Brand Management, Services Marketing, Integrated Marketing Communication (IMC), Principles of Management, General Management, Strategic Management, Small and Medium Enterprise Management, Innovation Management, Change Management, Knowledge Management, Strategic Planning, Operations Management, Supply Chain Management, Logistics Management, Inventory management, Total Quality Management (TQM), Productions Management, Project Management, Production Planning, Human Resource Management (HRM), Human Resource Development, Strategic HRM, Organizational Planning, Performance and Compensation Management, Recruitment and Selection, Organizational Development, Global Issues in Human Resource Management, Retail Marketing, Entrepreneurship, Entrepreneurial Marketing, International Business, Research Methods in Business, Business Communication, Business Ethics.
158+ Reviews
236+ Question Solved
Related Book For 
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
Question Posted:
