Which of the following characteristics may result in the classification of a liability as current?
A) Short-term obligations expected to be refinanced with long-term debt
B) Debts to be liquidated from funds that have been accumulated and are reported as noncurrent assets
C) Violation of provisions of a debt agreement
D) Obligations for advance collections that involve long-term deferment of the delivery of goods or services

Question

Quizplus · Accepted Answer

A liability is classified as current if there is a violation of provisions of a debt agreement that makes the debt due on demand or within the fiscal year, regardless of its original terms.

Which of the Following Characteristics May Result in the Classification