Bark Three Times Pet Store established a line of credit with its local banker and used (borrowed) $85,000 against it to purchase its first year's inventory. Since it is required to repay the money before the end of its fiscal year, the company's accountant lists this liability with the current liabilities on the balance sheet.

Question

Quizplus · Accepted Answer

The liability to repay the borrowed money is due within the current fiscal year, so it should be listed as a current liability on the balance sheet.

Bark Three Times Pet Store Established a Line of Credit