Long-term debt refers to those liabilities that:
A)have established a sinking fund for repayment.
B)are not callable at the option of the firm.
C)are secured by specific collateral.
D)have a maturity of more than one year remaining.

Question

Quizplus · Accepted Answer

Long-term debt refers to those liabilities that have a maturity of more than one year remaining. Option A refers to a sinking fund, which is a provision that a company makes to set aside money over time to repurchase outstanding debt securities, but this is not a requirement for a liability to be classified as long-term debt. Option B refers to callable debt, which can be repurchased by the company at a specific price and date, but this does not necessarily affect the term of the liability. Option C refers to secured debt, which is backed by specific collateral, but again, this is not a requirement for a liability to be classified as long-term debt.

Long-Term Debt Refers to Those Liabilities That