Correct classification distinguishing current and long-term liabilities is important as it affects the evaluation of a companys liquidity.

1. Current liabilities debts and obligations a company expects to satisfy within one year or within its normal operating cycle, whichever is shorter.
2. Long-term liabilities - debts and obligations a company expects to satisfy beyond one year or beyond its normal operating cycle, whichever is shorter.

A. True

B. False