Long-term obligations (i.e., debts)that is callable for early payment:
A)Must be reported as current liabilities by the debtor if callable on demand.
B)Must continue to be classified as a long-term liability in all situations.
C)Can be reported as current liabilities by the debtor only if callable because a provision of the debt covenant has been violated.
D)Must continue to be classified as a long-term liability by the debtor, if a provision of the debt covenant has been violated.

Question

Quizplus · Accepted Answer

If a long-term obligation is callable on demand, it must be reported as a current liability by the debtor, as it could be required to be settled within the next year.

Long-Term Obligations (I