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What happens if a current liability is misclassified in the balance sheet as long term liability and vice versa?
Wiki User
∙ 12y ago
Technically speaking, not a lot.
They are both liabilities, only difference being current are due within a year and long term is due after a year.
So the balance sheet will still balance, just those two areas may look a but odd.
Wiki User
∙ 12y ago
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Is an overdraft a liability?
Bank Overdraft as Liability by Kayors Yes, a bank overdraft are classified as a current liability. What happens here is withdrawls from the bank exceed deposits. The lending institution, usually the bank, would allow an extension of credit in such a case. The company is usually expected to pay within short-term and it results in negative balance in company's bank account. That is the reason for the overdraft being classified as a current liability.
Is a bank overdraft an liability?
Bank Overdraft as Liability by Kayors Yes, a bank overdraft are classified as a current liability. What happens here is withdrawls from the bank exceed deposits. The lending institution, usually the bank, would allow an extension of credit in such a case. The company is usually expected to pay within short-term and it results in negative balance in company's bank account. That is the reason for the overdraft being classified as a current liability.
What happens if an accrued liability for salaries is not recorded?
If an accrued liability is not recorded, then it is not a liability on the balance sheet. Not sure if the employee's could sue - that's a legal question - but if it was paid at a later date then it would be an expense at the time the liability was paid. If you mean to ask - what happens if an accrued liability for salaries is not paid, or is not timely paid - then the IRS can deny the deduction.
What happens if you fail to record a liability?
if one faills to record a liabilt your whole income and balance sheet goes out of place
What does a debit do to balance sheet?
The exact definition of debit is The amount entered on the left side of the account. Depending on what account a debit is being entered in, makes the difference as to what happens on the Balance Sheet. An Asset that has a debit balance is increased by a debit, thus increasing assets. A liability (which generally has a credit balance) will be decreased by a debit. Hence, debiting assets such as Cash, Accounts Receivable, Supplies, Equipment, etc will increase Assets on the balance sheet. Debiting liability accounts such as accounts payable, notes payable, etc, will "decrease" said liability therefore decreasing liabilities on the balance sheet.
What happens to your credit if you give your house back to the bank?
The bank will put up the house for auction and recover the money loaned to you. Residual balance of the liability, if any, standing against your name post auction will be returned to you.
What is an accured liability?
A liability that arises because an expense happens in a time span former to the associated money payment.
What happens if the other driver in an accident denies liability?
Never admit to liability in an accident. Exchange your details and let the insurance companies deal with it.
What happens if you haven't paid the remaining balance after the repossession?
"remaining balance" as in what you are behind OR the remaining balance due on the loan??
What happens at the end of a cold current?
- The Greenland Current -The Kamchatka Current -The Labrador Current
What happens to current at resonant frequency?
Current is at maximum
What happens if insurance companies cannot agree liability?
Typically they would arbitrate the matter.
