Of the following statements, which best illustrates the fact that the formal distinction made between current and noncurrent assets is somewhat arbitrary?
A) Cash in a checking account is a current asset, while cash in a savings account is more permanent and is normally classified as noncurrent.
B) Inventory that may be sold next year, or in the subsequent year as demand dictates may be classified as current or noncurrent.
C) Accounts receivable due in less than one year or the operating cycle are classified as current assets, while accounts receivable due in longer than one year or the operating cycle are classified as noncurrent.
D) An amount equal to the current depreciation charge on buildings should be placed in the current assets section at the beginning of the year, because it will be consumed in the next operating cycle.

Question

Quizplus · Accepted Answer

The Answer of Of the following statements, which best illustrates the fact that the formal distinction made between current and noncurrent assets is somewhat arbitrary?
A) Cash in a checking account is a current asset, while cash in a savings account is more permanent and is normally classified as noncurrent.
B) Inventory that may be sold next year, or in the subsequent year as demand dictates may be classified as current or noncurrent.
C) Accounts receivable due in less than one year or the operating cycle are classified as current assets, while accounts receivable due in longer than one year or the operating cycle are classified as noncurrent.
D) An amount equal to the current depreciation charge on buildings should be placed in the current assets section at the beginning of the year, because it will be consumed in the next operating cycle.

Of the Following Statements, Which Best Illustrates the Fact That