Question

Liabilities are classified as______

O revenues and expenses.
O operating and nonoperating.
O operating and investing.
O current and long-term.

Answer 1

Liabilities are classified as current and long-term, where current liabilities are due within one year or an operating cycle and long-term liabilities are due beyond one year.

Step-by-step explanation:

Liabilities are classified as current and long-term. Current liabilities, also known as short-term liabilities, are obligations that a company expects to pay within one year or one operating cycle, whichever is longer. Examples of current liabilities include accounts payable, short-term loans, and accrued expenses.

In contrast, long-term liabilities are obligations that are due more than one year from the date of the balance sheet or beyond the current operating cycle. Examples of long-term liabilities include long-term debt, bonds payable, and deferred tax liabilities.