Hi Karen -
Love to help people trying to learn. Good for you for following through on this. You are absolutely correct.
This is one of those accounting things that is universal, meaning applicable in Accounting so not just in QB.
If I knew how to attach files here, I would share a nice diagram illustrating this, but here is quick summary:
Assets
Current (or)
Non-current
same as:
Assets
Short-term
Long-term
Current/Short-term = Less than 12 months to convert to cash
Non-Current/Long-term = More than 12 months to convert to cash
In the context we are discussing, Credit Cards are always paid within 12 months = Current Assets.
Loans (Notes) might be short or long-term, depends on the loan agreement and when total is due.
Intercompany is usually Long-term since you typically have a balance for the life of the company.
Assuming that made sense, here is the hard part in my opinion, you often see like this on Finanicials:
Current Assets
Long-term Assets
Why in the heck did we split so nicely and clearly and then pick one from each group?
Sorry, can't answer that, I just know that is the practice that has developed over centuries I assume.
The good news is that there is soem consistency here in that you have exact same thing in Liabilities.
Liabilities
Current
Non-current
same as:
Liabilities
Short-term
Long-term
Exact same but opposite, since assets you own and liabilities you owe.
Anyone care to give example of each of these categories of Liabilities?
