c. Current liability if it is probable that creditor will call the debt within the year, otherwise a long-term liability.
d. Current liability
40. Which of the following is not a condition necessary to exclude a short-term obligation from current liabilities?
a. Intend to refinance the obligation on a long-term basis. b. Obligation must be due with one year. c. Demonstrate the ability to complete the refinancing. d. Subsequently refinance the obligation on a long-term basis.
41. Which of the following does not demonstrate evidence regarding the ability to consummate a refinancing of short-term debt?
a. Management indicated that they are going to refinance the obligation.
b. Actually refinance the obligation.
c. Have capacity under existing financing agreements that can be used to refinance the obligation.
d. Enter into a financing agreement that clearly permits the entity to refinance the obligation.
42. A company has not declared a dividend on its cumulative preferred stock for the past three years. What is the required accounting treatment or disclosure in this situation?