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

Long-term financing would normally be used to purchase which of the following?

A building for company operations

Monthly utility services

Office supplies

Inventory for resale

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Verified step by step guidance

Understand the concept of long-term financing: Long-term financing refers to funds borrowed or raised for a period longer than one year. It is typically used for acquiring assets or investments that have a long-term benefit to the company.

Identify the nature of the options provided: Analyze each option to determine whether it represents a long-term asset or a short-term expense. For example, a building for company operations is a long-term asset, while monthly utility services, office supplies, and inventory for resale are short-term expenses or assets.

Match the purpose of long-term financing with the options: Long-term financing is suitable for purchasing assets that provide benefits over several years, such as a building. Short-term expenses like utility services or office supplies are typically funded through short-term financing or operational cash flow.

Consider the accounting treatment: A building is classified as a fixed asset on the balance sheet and is depreciated over its useful life, aligning with the long-term nature of the financing. In contrast, utility services, office supplies, and inventory are either expensed immediately or classified as current assets.

Conclude the reasoning: Based on the analysis, long-term financing would be used to purchase a building for company operations because it aligns with the purpose of acquiring long-term assets that contribute to the company's operations over an extended period.