Question

If any portion of a long-term debt is to be paid in the next year, the entire debt should be classified as a current liability. A. True B. False

Answer 1

B. False

Step-by-step explanation:

The portion of a long term liability that is due within one year is called current portion of long-term debt (CPLTD). The name basically explains everything. E.g. you owe a note receivable worth $100,000 and every year you must pay an installment of $10,000 plus interest. The CPLTD (current liability) = $10,000, and the long term debt = $90,000.