How to classify the debt


Consider the following questions:

1. Amounts collected for third parties represent liabilities until remitted. Provide several examples of this kind of collection.

2. When companies have debt that is not due to be paid for several years but that is callable (due on demand) by the creditor, do they classify the debt as current or as long-term?

If possible, please give examples to better understand your response.

 

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Financial Accounting: How to classify the debt
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