Question

What are current assets? a. assets taht will be used for many years assets b. that must be paid for within 12 months any assets c. that were purchased for cash assets d. that will be used up or converted to cash within 12 months

Answer 1

Answer:

The answer is D. That will be used up or converted to cash within 12 months.

Explanation:

Assets are what an entity owns and controls or Asset is a resource controlled by an entity as a result of past events and from which economic benefits are expected to flow to the entity.

Current assets are assets that are expected to provide economic benefits within a year(12months)

Examples are cash and cash equivalent, inventory, accounts payable, accounts receivable.

Option A is incorrect because any asset that can last for more than a year or many years is a non-current asset e.g plant and equipment, land etc.

Option B is also incorrect because any asset must be paid for within 12 months is a liability