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 is an example of a financial obligation best satisfied with long-term debt?

Issuing bonds to finance the construction of a new factory

Settling accounts payable within 30 days

Paying monthly utility bills

Paying employee salaries

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Verified step by step guidance

Understand the nature of long-term debt: Long-term debt refers to financial obligations that are due over a period longer than one year. Examples include bonds, mortgages, and loans used for significant investments or projects.

Analyze the options provided: Review each option to determine whether it aligns with the characteristics of long-term debt. Specifically, look for obligations that involve financing large, long-term projects or investments.

Option 1: Issuing bonds to finance the construction of a new factory. Bonds are a form of long-term debt, and constructing a new factory is a significant investment that typically requires long-term financing.

Option 2: Settling accounts payable within 30 days. Accounts payable are short-term obligations, usually settled within a few weeks or months, and do not involve long-term debt.

Option 3 and 4: Paying monthly utility bills and employee salaries. These are recurring short-term expenses and are not associated with long-term debt. Therefore, the correct answer is the option involving bonds and factory construction.