Jaylah has a 5-year bank loan with her business.The principle that is scheduled to be paid in the last 4 years is considered ______.

Question

Quizplus · Accepted Answer

The principle that Jaylah is scheduled to pay in the last 4 years of her 5-year bank loan is a long-term liability, as it will not be due for payment until after one year from the current date. Option A is incorrect because the principle is not a loss, but rather a portion of the loan that needs to be repaid. Option C is incorrect because short-term portion of long-term debt refers to the portion of a long-term loan that is due in the current year, whereas in this scenario, the portion due is in future years. Option D is incorrect because operational cash flows refer to the cash flows generated from the operations of a business, which is not relevant to the principle that is scheduled to be paid in the last 4 years of Jaylah's bank loan.

Jaylah Has a 5-Year Bank Loan with Her Business