Which of the following items is usually classified as a noncurrent asset?
A) Prepaid rent
B) Plant expansion fund
C) Supplies
D) Goods that are in the process of being completed for another company

Question

Quizplus · Accepted Answer

Noncurrent assets are assets that are not expected to be converted into cash within one year or the normal operating cycle of the business, whichever is longer. Prepaid rent (A) and supplies (C) are current assets because they are expected to be used up within one year, while goods in the process of being completed for another company (D) are considered work in progress and not yet classified as assets. Plant expansion fund (B) is a long-term savings account set up by a company for future expansion projects, and is therefore classified as a noncurrent asset.

Which of the Following Items Is Usually Classified as a Noncurrent