Which of the following should not be considered as a current asset in the balance sheet?
A)Installment notes receivable due over 18 months in accordance with normal trade practice.
B)Prepaid taxes which cover assessments of the following operating cycle of the business.
C)Equity or debt securities purchased with cash available for current operations.
D)The cash surrender value of a life insurance policy carried by a corporation, the beneficiary, on its president.

Question

Quizplus · Accepted Answer

The cash surrender value of a life insurance policy carried by a corporation, the beneficiary, on its president should not be considered as a current asset because it is a long-term asset as it involves a life insurance policy with a cash value. The other options, installment notes receivable, prepaid taxes, and equity or debt securities are all current assets that can be converted to cash within a year or operating cycle of the business.

Which of the Following Should Not Be Considered as a Current