Question

Current assets are those assets that can be converted into cash within:
A. One year and never longer.
B. One year or the operating cycle, whichever is longer.
C. One year or the operating cycle, whichever is shorter.
D. Management's discretion.

Answer 1

Answer:

B. One year or the operating cycle, whichever is longer.

Explanation:

Current Assets are assets that can be converted into cash within a year or an operating cycle whichever is longer.

Current Assets are presented first on a balance sheet and arranged in order of liquidity.

Examples of current assets are cash ,

cash equivalents , short-term investments, accounts receivable and stock inventory.

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