Liabilities are generally classified on a statement of financial position as
A) tangible liabilities and intangible liabilities.
B) small liabilities and large liabilities.
C) present liabilities and future liabilities.
D) current liabilities and non-current liabilities.

Question

Quizplus · Accepted Answer

Liabilities are commonly divided into two categories: current liabilities and non-current liabilities (formerly known as long-term liabilities). Current liabilities are obligations that are due within one year or the current operating cycle (whichever is longer), while non-current liabilities are obligations that are due after one year or beyond the current operating cycle. This classification is important for financial statement readers to understand the company's short-term and long-term debt obligations. Therefore, D is the best choice.

Liabilities Are Generally Classified on a Statement of Financial Position