Which of the following is a long-term liability?

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Multiple Choice

Which of the following is a long-term liability?

In accounting, liabilities are classified by when they are due. Long-term liabilities are obligations that mature after one year (or beyond the normal operating cycle). Bonds fit this category because they are debt instruments issued to borrow funds with maturities typically spanning several years, often 5, 10, 20, or 30 years, and principal repayment occurs at or after the end of the term. They also involve interest payments over the life of the bond. The other items are current liabilities: accounts payable are amounts owed for purchases expected to be paid soon, accrued expenses represent obligations for expenses incurred but not yet paid in the near term, and short-term debt is debt that matures within one year. Therefore, bonds are the long-term liability.

In accounting, liabilities are classified by when they are due. Long-term liabilities are obligations that mature after one year (or beyond the normal operating cycle). Bonds fit this category because they are debt instruments issued to borrow funds with maturities typically spanning several years, often 5, 10, 20, or 30 years, and principal repayment occurs at or after the end of the term. They also involve interest payments over the life of the bond.

The other items are current liabilities: accounts payable are amounts owed for purchases expected to be paid soon, accrued expenses represent obligations for expenses incurred but not yet paid in the near term, and short-term debt is debt that matures within one year. Therefore, bonds are the long-term liability.

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