Which of the following is not characteristic of a current asset?
A) The entity expects to realize or use the asset in its normal operating cycle
B) The entity holds the asset for capital purposes
C) The entity expects to realize the asset within one year of the reporting period
D) The asset is cash or a cash equivalent
E) All of the above are characteristics of a current asset.

Question

Quizplus · Accepted Answer

Current assets are expected to be sold, consumed, or converted into cash either in one year or within the operating cycle of the business, whichever is longer. They include cash, inventory, and accounts receivable, among others. Holding an asset for capital purposes (B) is not characteristic of a current asset; instead, it describes a non-current (fixed or long-term) asset, which is intended for use over a longer period and not expected to be converted into cash within a short period.

Which of the Following Is Not Characteristic of a Current