Question

woods co. has a note payable due in monthly installments over the next five years. this note will be reported under which of the following categories of the balance sheet? (check all that apply.) multiple select question. long-term assets current liabilities long-term liabilities current assets

Answer 1

The note payable by Woods Co. will be reported under both current liabilities for the portion due within one year, and long-term liabilities for the remainder due after one year.

Step-by-step explanation:

Woods Co.'s note payable that is due in monthly installments over the next five years will be categorized under both current liabilities and long-term liabilities on the balance sheet. The portion of the note that is payable within the next 12 months will be listed as a current liability, reflecting the short-term debt obligation. The remaining balance, which is due after one year, will be listed under long-term liabilities, representing the obligation that extends beyond the current fiscal year.

Answer 2

The note payable will be split and reported under current liabilities for the amount due within one year and under long-term liabilities for the remaining balance due after one year on Woods Co.'s balance sheet.

Step-by-step explanation:

The note payable that Woods Co. has, which is due in monthly installments over the next five years, would be reported in the balance sheet under both current liabilities and long-term liabilities. Current liabilities represent debts or obligations that are due within one year from the balance sheet date, while long-term liabilities are those that are due after more than one year. The portions of the note payable due within the next year will be listed as a current liability, and the remaining balance due beyond one year will be listed as a long-term liability.

As a contrast, assets such as cash or a home would be listed on the balance sheet as either current assets or long-term assets, depending on the asset's liquidity or the expected time it will be converted into cash.