BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Debts to be paid more than one year from now are claims against the firm’s assets:in other words, they are long-term liabilities. These claims are from ____ who have provided capital to the firm but whose entire repayment is not due during the coming year or operating cycle.
A
banks and bondholders
B
banks and stockholders
C
stockholders and bondholders
D
all long-term lenders
Explanation: 

Detailed explanation-1: -Debts to be paid more than one year from now are claims against the firm’s assets: in other words, they are long-term liabilities.

Detailed explanation-2: -Understanding Long-Term Debt Long-term debt is debt that matures in more than one year.

Detailed explanation-3: -Noncurrent Liabilities – Liabilities that do not fall due (paid, recognized as revenue) within one year after year-end date. Examples include Loans Payable, Mortgage Payable, etc. Noncurrent assets and noncurrent liabilities are also called long term assets and long term liabilities.

Detailed explanation-4: -Short-term debt, also called current liabilities, is a firm’s financial obligations that are expected to be paid off within a year. Common types of short-term debt include short-term bank loans, accounts payable, wages, lease payments, and income taxes payable.

There is 1 question to complete.