Question

question 17

roger has a balance on an outstanding three year loan. that balance is an example of a long-term

Explanation:

🆕 New Concept Discovered: Liability Classification
Distinguishing short-term and long-term financial obligations.

Step 1: Identify the nature of the balance

Roger has an outstanding balance on a loan. Because this is money that Roger owes to a lender, it represents a financial obligation, which is classified as a liability in accounting and personal finance.

Step 2: Determine the time horizon

In accounting, financial obligations are classified based on their settlement timeframe:

• Current (short-term) liabilities: Obligations expected to be settled within one year.
• Non-current (long-term) liabilities: Obligations due beyond one year.

Since the loan is a three-year loan, the repayment period extends past the standard one-year threshold. Therefore, this outstanding balance is classified as a long-term liability.

Answer:

long-term liability