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April 26, 2015

Homework Help: Accountant

Posted by Timothy on Friday, January 1, 2010 at 4:49pm.

It is stand accounting procedures, or GAAP, to make an adjusting entry to remove the current yearís principle from the long-term liabilities. This entry reduces the long-term liabilities and increases the current liabilities. You are the bookkeeper for Bikerís Business. Bikerís Business has a bank loan that requires a current ratio of 1.5 times. The owner has asked that you do not make the adjusting entry to take the current portion from the long-term liabilities. You know if you make the adjusting entry Bikerís Businessí loan will need to be repaid immediately (or the loan called). What should you do?

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