Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 16 - No. 41)
Which of the following best describes a 'current asset'?
An asset that is expected to be used up or converted to cash within one year.
An asset that is expected to last for more than one year.
An asset that cannot be readily converted to cash.
An asset that has no value.
Explanation
A current asset is an asset that is expected to be consumed, sold, or converted to cash within one year or the company's normal operating cycle, whichever is longer.
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