Which of the following items would most likely not be classified as a current asset?
A)Office equipment
B)Merchandise inventory
C)Office supplies
D)Prepaid rent

Question

Quizplus · Accepted Answer

A current (short-term)asset is expected to be converted to cash or consumed within one year or an operating cycle,whichever is longer.An operating cycle is defined as the average time it takes a business to convert cash to inventory,inventory to accounts receivable,and accounts receivable back to cash.Merchandise inventory,office supplies,and prepaid rent would be classified as current assets.Office equipment is not a current asset because it would be used for more than one year or one operating cycle.

Which of the Following Items Would Most Likely Not Be