Which of the following is not a current liability?

Question

Which of the following is not a current liability?

 

A. Accounts payable.

B. A note payable due in 2 years.

C. Current portion of long-term debt.

D. Sales tax payable.

Answer 1

Bassam,

 

The cut-off for the classification "current" is a one-year period.  In this case, the giveaway is the phrase "due in 2 years."  That would not be current.

 

Note also that accounts and sales tax need to paid within one year and they are therefore current.

Answer 2

Bassam,

 

It is note payable due in 2 years.