Current liabilities: Current liabilities are debt obligations that need to be paid within a period of one year or less. Current liabilities are not always paid within one year. If company follows operating cycle then the current liabilities are defined according to the operating cycle of the company rather than the length of the year. Example: Notes Payable, Accounts Payable, Payroll Liabilities. Long-term Liabilities: Long –term liabilities are debt obligations which are to be paid for more than one year. Example: Mortgage Payable, Bonds Payable, Long-term notes Payable To Discuss: The reason behind the importance of distinguishing between current and long-term liabilities.

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Answer 1

Question

Chapter 8, Problem 3RQ

To determine

Current liabilities:

Current liabilities are debt obligations that need to be paid within a period of one year or less. Current liabilities are not always paid within one year. If company follows operating cycle then the current liabilities are defined according to the operating cycle of the company rather than the length of the year.

Example: Notes Payable, Accounts Payable, Payroll Liabilities.

Long-term Liabilities:

Long –term liabilities are debt obligations which are to be paid for more than one year.

Example: Mortgage Payable, Bonds Payable, Long-term notes Payable

To Discuss: The reason behind the importance of distinguishing between current and long-term liabilities.

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1. What should be reported as total current liabilities? 2. What amount should be reported as total noncurrent liabilities?

In what way do current liabilities and long-term liabilities differ from each other?

Difference between current and long term liabilities?

Answer 2

Question

Chapter 8, Problem 3RQ

To determine

Current liabilities:

Current liabilities are debt obligations that need to be paid within a period of one year or less. Current liabilities are not always paid within one year. If company follows operating cycle then the current liabilities are defined according to the operating cycle of the company rather than the length of the year.

Example: Notes Payable, Accounts Payable, Payroll Liabilities.

Long-term Liabilities:

Long –term liabilities are debt obligations which are to be paid for more than one year.

Example: Mortgage Payable, Bonds Payable, Long-term notes Payable

To Discuss: The reason behind the importance of distinguishing between current and long-term liabilities.

Expert Solution & Answer

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Answer 3

Question

Chapter 8, Problem 3RQ

To determine

Current liabilities:

Current liabilities are debt obligations that need to be paid within a period of one year or less. Current liabilities are not always paid within one year. If company follows operating cycle then the current liabilities are defined according to the operating cycle of the company rather than the length of the year.

Example: Notes Payable, Accounts Payable, Payroll Liabilities.

Long-term Liabilities:

Long –term liabilities are debt obligations which are to be paid for more than one year.

Example: Mortgage Payable, Bonds Payable, Long-term notes Payable

To Discuss: The reason behind the importance of distinguishing between current and long-term liabilities.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 3RQ

To determine

Current liabilities:

Current liabilities are debt obligations that need to be paid within a period of one year or less. Current liabilities are not always paid within one year. If company follows operating cycle then the current liabilities are defined according to the operating cycle of the company rather than the length of the year.

Example: Notes Payable, Accounts Payable, Payroll Liabilities.

Long-term Liabilities:

Long –term liabilities are debt obligations which are to be paid for more than one year.

Example: Mortgage Payable, Bonds Payable, Long-term notes Payable

To Discuss: The reason behind the importance of distinguishing between current and long-term liabilities.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 3RQ

To determine

Current liabilities:

Current liabilities are debt obligations that need to be paid within a period of one year or less. Current liabilities are not always paid within one year. If company follows operating cycle then the current liabilities are defined according to the operating cycle of the company rather than the length of the year.

Example: Notes Payable, Accounts Payable, Payroll Liabilities.

Long-term Liabilities:

Long –term liabilities are debt obligations which are to be paid for more than one year.

Example: Mortgage Payable, Bonds Payable, Long-term notes Payable

To Discuss: The reason behind the importance of distinguishing between current and long-term liabilities.

Answer 6

Chapter 8, Problem 3RQ

To determine

Current liabilities:

Current liabilities are debt obligations that need to be paid within a period of one year or less. Current liabilities are not always paid within one year. If company follows operating cycle then the current liabilities are defined according to the operating cycle of the company rather than the length of the year.

Example: Notes Payable, Accounts Payable, Payroll Liabilities.

Long-term Liabilities:

Long –term liabilities are debt obligations which are to be paid for more than one year.

Example: Mortgage Payable, Bonds Payable, Long-term notes Payable

To Discuss: The reason behind the importance of distinguishing between current and long-term liabilities.

Answer 7

Chapter 8, Problem 3RQ

To determine

Current liabilities:

Current liabilities are debt obligations that need to be paid within a period of one year or less. Current liabilities are not always paid within one year. If company follows operating cycle then the current liabilities are defined according to the operating cycle of the company rather than the length of the year.

Example: Notes Payable, Accounts Payable, Payroll Liabilities.

Long-term Liabilities:

Long –term liabilities are debt obligations which are to be paid for more than one year.

Example: Mortgage Payable, Bonds Payable, Long-term notes Payable

To Discuss: The reason behind the importance of distinguishing between current and long-term liabilities.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 8 - Prob. 1RQ Ch. 8 - Prob. 2RQ Ch. 8 - Prob. 3RQ Ch. 8 - Provide examples of current liabilities in the...Ch. 8 - Prob. 5RQ Ch. 8 - Prob. 6RQ Ch. 8 - How does commercial paper differ from a normal...Ch. 8 - Prob. 8RQ Ch. 8 - Prob. 9RQ Ch. 8 - Prob. 10RQ

Solution Summary: The author explains the importance of distinguishing between current and long-term liabilities as it helps investors and creditors assess the quantum of risk involved in the business' obligations.

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