QUESTION: A company has a liability for unpaid taxes of $10,000. The company expects to pay the liability in the next 6 months. What would be the classification of the liability in the balance sheet?

Answer: The liability would be classified as a current liability, since the company expects to pay it within the next 12 months.

Here's the tabulated classification of the liability in the balance sheet:

The liability for unpaid taxes of $10,000 would be classified as a current liability in the balance sheet since the company expects to pay it within the next 12 months. Current liabilities are obligations that are due and payable within a year or within the normal operating cycle of the business, whichever is longer.

Therefore, the classification of the liability in the balance sheet would be:

Current liability - $10,000