Mortgage payable falls under which liability category?

• A. Short-Term Notes
• B. Current Portion of Long-Term Debt
• C. Mortgage Payable
• D. Taxes Payable

Answer: (C)

Debt obligations are classified by when the payment is due. A mortgage payable is a long-term debt, meaning it generally extends beyond one year, so it appears on the balance sheet as a long-term liability. If part of that mortgage becomes due within the next year, that portion is shown separately as the current portion of long-term debt and presented under current liabilities, while the remaining balance stays in long-term liabilities. Short-term notes are used for obligations due within a year, and taxes payable is another current liability category for taxes owed. So, mortgage payable falls under the long-term liabilities category, with the current portion separated out only if due within the next year.