When using the current/noncurrent method,current assets are defined as
A)inventory that is currently salable.
B)assets with a maturity of one year or less.
C)assets with a maturity of 90 days or less.
D)none of the options

Question

Quizplus · Accepted Answer

Current assets are defined as assets that are expected to be converted into cash or used up within one year or the operating cycle, whichever is longer. This includes assets such as cash, accounts receivable, and inventory, as well as prepaid expenses and any other assets that are expected to be converted into cash within the next year. Therefore, option B is the best choice, as it correctly defines current assets as assets with a maturity of one year or less. Option A is too narrow, as it only includes salable inventory, and option C is too short a time frame, as 90 days is not necessarily long enough for an asset to be considered noncurrent. Option D is incorrect, as there is a correct option available.

When Using the Current/noncurrent Method,current Assets Are Defined as