149k views
1 vote
Among the short-term obligations of Larsen Company as of December 31, the balance sheet date, are notes payable totaling $250,000 with the Dennison National Bank. These are 90-day notes, renewable for another 90-day period. These notes should be classified on the balance sheet of Larsen Company as:__________

a. current liabilities.
b. deferred charges.
c. long-term liabilities.
d. intermediate debt.

User AlBirdie
by
8.6k points

1 Answer

3 votes

Answer:

a. current liabilities.

Step-by-step explanation:

Current liabilities describe debts or a company's obligations that are due for payment within the current financial year or operating cycle. A company uses current assets to settle current liabilities. Examples of current liabilities include declared dividends, accounts payables, interest payables, short term loans, and current maturing long term debts.

A sizeable amount of current liabilities calls for attention as a proportionate size of current assets is required to offset them. Sometimes companies may be required to take up debts to pay current liabilities.

User Asif Asghar
by
7.9k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.