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

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Multiple Choice

Which of the following would be considered a long-term liability?

Unearned revenue (to be earned within 6 months)

Accounts payable

A 10-year bond payable

Salaries payable

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Verified step by step guidance

Step 1: Understand the concept of long-term liabilities. Long-term liabilities are obligations that a company expects to settle after more than one year or operating cycle. Examples include bonds payable, long-term loans, and lease obligations.

Step 2: Analyze each option provided in the problem to determine whether it qualifies as a long-term liability. Unearned revenue (to be earned within 6 months) is a short-term liability because it will be settled within the operating cycle. Accounts payable is also a short-term liability as it is typically due within a few months. Salaries payable is a short-term liability because it represents wages owed to employees, usually settled within the next payroll period.

Step 3: Focus on the option 'A 10-year bond payable.' Bonds payable are typically issued for long-term financing purposes, and the 10-year term indicates that the obligation will be settled after more than one year, making it a long-term liability.

Step 4: Confirm the classification of the correct answer. Since the 10-year bond payable meets the criteria for a long-term liability, it is the correct answer.

Step 5: Summarize the reasoning: Long-term liabilities are obligations due after more than one year, and among the options provided, only the 10-year bond payable fits this definition.