1. Which if the following statements is correct?

a. A short-term note payable can be excluded from current liabilities if the company
intends to refinance it on a long-term basis and demonstrates the ability to consummate
the refinancing
b. Discount on notes payable is a contra account to notes payable on the balance sheet
c. A zero-interest-bearing note payable that is issued at a discount will not result in any
interest expense being recognized
d. Dividends in arrears on cumulative preferred share should be recorded as a current
liability