Multiple choice

Which of the following is a correct way to calculate long term liability?

  1. Total liabilities - current liabilities

  2. Revenue - expenses

  3. Net working capital + current liabilities

  4. Current assets - current liabilities

  5. Current assets/current liability
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A Correct answer
Explanation

This is the correct way to calculate long term liability. Long term liabilities are liabilities with future benefit of 1 year, such as notes payable that mature after one year.

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