Under US GAAP liabilities payable within one year can be exc

Under U.S. GAAP, liabilities payable within one year can be excluded from current liabilities only if:

a/ The business intends to refinance the obligations on a long-term basis.

b/ The business has the demonstrated ability to refinance the obligations on a long-term basis.

c/ The business has the intent and the ability to refinance the obligation on a long-term basis.

d/ Liabilities payable within one year always must be classified as current liabilities.

Multiple Choice

Solution

Under US GAAP liabilities payable within one year can be excluded from current liabilities only if.

Answer. C

The business has the intent and the ability to refinance the obligation on a long-term basis.

SFAS no 6

State of Financial Accounting Standard

Specifies that

Debts to be refinanced from current liabilities. Only if

The company intends and the ability to refinance obligation on a long-term basis.