Which of the following is not considered a current liability?
A. Accounts Payable
B. Unearned Revenue
C. the component of a twenty-year note payable due in year 20
D. current portion of a noncurrent note payable
Concept introduction:
One the basis of period, liabilities can be divided into current liabilities and noncurrent liabilities. A liability which is payable within next accounting year is considered as short-termliability and all other liabilities are considered as long term or no current liabilities.
To choose:
The option that is not a current liability.
Answer to Problem 1MC
The Component of a twenty year note payable due in year 20
Explanation of Solution
Explanation for correct answer:
A liability which is payable within next accounting year is considered as short-term liabilityand all other liabilities are considered as long term or no current liabilities.The Component of a twenty year note payable due in year 20 is a Long Term liability. Hence the correct option is C.
Explanation for incorrect answers:
A. Accounts Payable is a Current Liability. Hence this option is incorrect.
B. Unearned Revenue is a Current Liability. Hence this option is incorrect.
D. Current portion of a noncurrent note payable is a current liability. Hence this option is incorrect.
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