Given a choice,most companies would prefer to report a liability as long-term rather than current because:
A)It may cause the firm to appear less risky to investors and creditors.
B)It may reduce interest rates on borrowing.
C)It may cause the company to appear more stable commanding a higher stock price for new stock listings.
D)All of the other answers are true.

Question

Quizplus · Accepted Answer

Reporting a liability as long-term rather than current can make a company appear less risky, potentially reduce borrowing costs, and enhance perceived stability, which can positively impact stock prices.

Given a Choice,most Companies Would Prefer to Report a Liability