On December 31, 2008, Jones Service co. has a $500,000, 120-day note payable out

Question

On December 31, 2008, Jones Service co. has a $500,000, 120-day note payable outstanding. The company policy is to replace the note rather than repaying it over the past three years. The company treasurer says the policy is expected to continue indefinitely and the arrangement is acceptable to the bank which the note was issued. The proper classification for the note on the December 31, 2008 balance sheet is :    A. dependant on the intention of managment   B. Dependant on the actual ability to refinance   C. Current liability, unless specific refinancing criteria are met   D. Noncurrent liability

Explanation / Answer

Option C : current liability

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