A long-term liability should be reported as a current liability in a classified balance sheet if the long-term debt

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A long-term liability should be reported as a current liability in a classified balance sheet if the long-term debt is callable by the creditor. This means that the creditor has the right to demand payment of the debt within the next year, making it necessary for the company to use current assets to fulfill this obligation.

A Long-Term Liability Should Be Reported as a Current Liability