Q1TI_2 - Horngren'S Financial And Managerial Accounting

Question

For each account listed, identify the category in which it would appear on a classified balance sheet.

2. Mortgage Payable (due in five years)

Step-by-Step Solution

Answer

Mortgage payable are reported as Long-term liabilities. 

Step-by-Step-Solution

Step 1: Explanation on Balance Sheet

Balance sheet is the part of the financial statements which are prepared at the end of the year to reports assets, liabilities and equities of the business.

Step 2: Explanation on Long term liabilities

Long term liabilities are the obligations which are payable after one year or after the operating cycle. Mortgage loan is payable in five years, hence it will be classified as long term liabilities.