It is standard accounting procedure, or a generally accepted
accounting principle (GAAP), to make a journal entry to remove the
current year's principle from the long-term liabilities. This entry
reduces the long-term liabilities and increases the current
liabilities. Your company has a bank loan that requires a current
ratio of 1.5 times. The owner has asked you, the bookkeeper, not to
make the adjusting entry that would take the current portion from
the long-term liabilities. If you make the adjusting...