The current asset section of a balance sheet includes:
A) All future income taxes resulting from inter-period income tax allocation.
B) Goodwill arising in a business combination accounted for as a purchase.
C) Rent receivable.
D) A receivable from a customer not collectible for over one year.

Question

Quizplus · Accepted Answer

The current asset section of a balance sheet includes assets that can reasonably be expected to be converted into cash within one year or less, such as cash, accounts receivable, inventory, and prepaid expenses. Rent receivable would fall under this category as it represents future cash inflows that are expected to arise within a year.

Option A is incorrect as future income taxes resulting from inter-period income tax allocation would fall under the category of deferred tax asset or liability, which is reported separately on the balance sheet. 
Option B is incorrect as goodwill arising in a business combination accounted for as a purchase would be reported separately under the intangible assets section of the balance sheet. 
Option D is incorrect as a receivable from a customer not collectible for over one year would not be classified as a current asset, but rather under the long-term assets section.

The Current Asset Section of a Balance Sheet Includes