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How is a long term liability that is paid deducted from net income for the current year?
Wiki User
∙ 12y ago
Long term liabilities do not get deducted from net income.
Gross Income - Expenses = Net Income
Net Income - Dividends = Retained Earnings.
Paying a Long Term Liability has the following effects on the accounting equation.
Decrease Assets (generally current as they are usually paid in cash)
Decrease Liabilities (it's less you owe)
Owners (stockholders) Equity is unchanged.
Wiki User
∙ 12y ago
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Is Demand loan a current liability or a long term liability?
a current liability
Are billings in excess of cost a current liability or long term liability?
Yes it is a current liability
Is it true all long term liabilties become current liabilities?
Long term liability becomes the current liability in that year in which it is to be cleared so Yes, long term liability become current liability.
Is a loan is current liability or long term liability in the balance sheet?
If loan is payable within twelve month of issuance of loan then it is current liability but if it is payable in more than one fiscal year then it is long term liability but even in long term loan, that portion of loan which is payable in current fiscal year is current liability and remaining portion is long term liability.
Is salary payable a current liability or long term liability?
It should be current liability because it is made monthly, not per year.
Is Demand loan a current liability or a long term liability?
a current liability
Are billings in excess of cost a current liability or long term liability?
Yes it is a current liability
Is it true all long term liabilties become current liabilities?
Long term liability becomes the current liability in that year in which it is to be cleared so Yes, long term liability become current liability.
Is a loan is current liability or long term liability in the balance sheet?
If loan is payable within twelve month of issuance of loan then it is current liability but if it is payable in more than one fiscal year then it is long term liability but even in long term loan, that portion of loan which is payable in current fiscal year is current liability and remaining portion is long term liability.
Is subordinated capital notes a current liability or a long term liability?
Long term
What is the fundamental variable which is used to determine if a liability is a current liability or a long term liability?
if liability is payable within one fiscal year then it is current liability while if it is payable for morethan one fiscal year then it is long terrm liability.
Is salary payable a current liability or long term liability?
It should be current liability because it is made monthly, not per year.
Sundry creditor is a -------------- 1.current liability 2.long term liability 3.current asset. 4.fixed asset.?
Sundry creditor is current liability.
What is the current portion of long-term debt classified with?
Current portion of long term loan is classified as current liability and shown under current liability section of balance sheet.
Is long term debt an operating liability?
NO. But the Current maturities of long-term debt is an operating liability.
Is a long term loan repayable in 6 years a non current asset or non current liability?
It is a loan repayable. Hence it is a liability. As the liability is for more than one year, it is non current liability.
What is the purpose of reporting current maturities of long term debt?
Purpose to report is to show that how much portion of long term debt will be paid or payable in current accounting year that's why that portion became current liability and not long term liability.
