MANAGEMENT

Detailed explanation-1: -Current liabilities are typically settled using current assets, which are assets that are used up within one year. Examples of current liabilities include accounts payable, short-term debt, dividends, and notes payable as well as income taxes owed.

Detailed explanation-2: -Notes payable appear as liabilities on a balance sheet. Additionally, they are classified as current liabilities when the amounts are due within a year. When a note’s maturity is more than one year in the future, it is classified with long-term liabilities.

Detailed explanation-3: -Notes payable are long-term liabilities that indicate the money a company owes its financiers-banks and other financial institutions as well as other sources of funds such as friends and family. They are long-term because they are payable beyond 12 months, though usually within five years.

Detailed explanation-4: -Answer and Explanation: Notes payable due within five years are classified as c) long-term liabilities. The going-concern principle means that accountants divide assets and liabilities into current and non-current categories.

Detailed explanation-5: -Answer and Explanation: False. The note payable that is due in 2 years should be classified as noncurrent liability because it is not to be settled within 12 months or operating cycle, whichever is longer.