Kurt has a 5-year bank loan with his business.The principle that is scheduled to be paid in the first 12 months is considered ______.
A)a loss
B)a long-term liability
C)a short-term portion of long term debt
D)operational cash flows

Question

Quizplus · Accepted Answer

The principle that is scheduled to be paid in the first 12 months is considered a short-term portion of long-term debt. This is because the loan is a long-term liability, but the portion that is due within the next 12 months is considered a current liability and is classified as a short-term portion of long-term debt on the balance sheet.

Kurt Has a 5-Year Bank Loan with His Business