Assets and liabilities are classified as either current or long-term to show their relative liquidity.

Question

Quizplus · Accepted Answer

This statement is true. Current assets and liabilities are expected to be used or settled within one year, while long-term assets and liabilities are expected to be used or settled beyond one year. Classifying them into current or long-term categories helps to assess their liquidity and financial health of the organization.

Assets and Liabilities Are Classified as Either Current or Long-Term