Bonds payable due in six months and for which an adequate bond sinking fund exists is not a current liability because:
A) the sinking fund is a current asset.
B) of the length of the operating cycle.
C) they are due within six months.
D) the bonds will be settled with an asset that is not a current asset.

Question

Quizplus · Accepted Answer

The bonds are not considered a current liability because they will be settled with a sinking fund, which is specifically set aside for this purpose and is classified as a non-current (long-term) asset, not a current asset.

Bonds Payable Due in Six Months and for Which an Adequate