Massawippi Inc.owes a supplier $10,000.They have signed a note payable for the amount, promising to repay it in six months with interest.They also have a loan outstanding that, starting next year, they will repay in annual instalments over the next five years.How would the note payable and the loan be reported on the balance sheet? $\begin{array}{ll}
&\text { Note Payable } &\text { Loan } \
A.&\text { Current liability } & \text { Current liability } \
B.&\text { Current liability } & \text { Non-current liability } \
C.&\text { Non-current liability } & \text { Current liability } \
D.&\text { Non-current liability } & \text { Non-current liability }
\end{array}$
A)Option A
B)Option B
C)Option C
D)Option D

Question

Quizplus · Accepted Answer

The note payable is due within six months, making it a current liability. The loan is to be repaid in annual installments starting next year, over five years, making the portion due within the next year a current liability and the remainder a non-current liability. However, since the question asks about the general classification, the loan is primarily considered a non-current liability because the bulk of it is due beyond the next year.

Massawippi Inc A)Option a B)Option B C)Option C D)Option D

Massawippi Inc A)Option a
B)Option B
C)Option C
D)Option D