Question: Why does the accounting profession no longer support the exclusion of short-term obligations expected to be refinanced from current liabilities, only if a company had

Why does the accounting profession no longer support the exclusion of short-term obligations expected to be refinanced from current liabilities, only if a company had the intent and ability to refinance?

Multiple choice

Because companies would always increase the long-term debt no matter what the reason.

So the auditors would not be able to understand how to classify the short-term debt.

To ensure comparability between companies over time.

Because it would require double entry accounting.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!