When companies borrow money for longer than one year,that obligation is called ________.
A)equity financing
B)a long-term liability
C)an operating activity
D)a current liability

Question

Quizplus · Accepted Answer

Long-term liabilities refer to debt or other financial obligations that are due in more than one year from the date of the balance sheet. Examples include loans, mortgages, and bonds. Equity financing refers to raising funds by selling ownership shares in the company, and is not a type of obligation. Operating activities refer to the day-to-day business operations of a company, and are not a type of financing. Current liabilities are obligations due within one year, so they do not fit the description given in the question.

When Companies Borrow Money for Longer Than One Year,that Obligation