Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following is considered a long-term liability?

Salaries payable

Unearned revenue (to be earned within 6 months)

Accounts payable

Bonds payable due in 10 years

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the concept of liabilities. Liabilities are obligations that a company owes to external parties, and they are classified into two categories: current liabilities (due within one year) and long-term liabilities (due after one year).

Step 2: Analyze each option provided in the problem. Salaries payable, unearned revenue (to be earned within 6 months), and accounts payable are all examples of current liabilities because they are expected to be settled within one year.

Step 3: Recognize that bonds payable due in 10 years is a long-term liability. This is because the obligation to repay the bond principal and interest extends beyond one year, specifically for a period of 10 years.

Step 4: Confirm the classification criteria for long-term liabilities. Long-term liabilities are obligations that are not expected to be settled within the company's operating cycle or one year, whichever is longer.

Step 5: Conclude that the correct answer is bonds payable due in 10 years, as it meets the definition of a long-term liability based on its repayment timeline.