Question

A long-term liability should be reported as a current liability in a classified balance sheet if the long-term debt: Is callable by the creditor. Will be refinanced with stock. Is secured by adequate collateral. Will be refinanced with debt.

Answer 1

Answer:

A long-term liability should be reported as a current liability in a classified balance sheet if the long-term debt: Is callable by the creditor - Will be refinanced with stock.

Option A is the correct answer.

Explanation:  

Generally, a short term liability is required to be paid by the company within a period of 1 year. Nevertheless, if the liability is callable the creditor, the company is not required to pay the liability within a year.

Thus, in this instance, a current liability can be detailed as a long term debt in the balance sheet.