The current/non-current basis of classifying assets and liabilities in the statement of financial position is based on their:
A) marketability
B) longevity
C) source
D) none of the above

Question

Quizplus · Accepted Answer

The current/non-current basis of classifying assets and liabilities in the statement of financial position is based on their longevity or expected duration of the entity's use and realization. Current assets and liabilities are those that are expected to be realized, settled or fulfilled within the entity's normal operating cycle or within 12 months from the reporting date, while non-current assets and liabilities are those that exceed this timeframe. This classification is important in assessing an entity's liquidity and solvency.

The Current/non-Current Basis of Classifying Assets and Liabilities in the Statement