Coletta is preparing the balance sheet for Zebra Athletics. She is struggling to determine how to classify the stocks her company owns prior to running the statement and asks for your help. You tell her that stocks are classified as
A) a current asset.
B) stakeholders' equity.
C) a long-term liability.
D) a fixed asset.
E) a short-term liability.

Question

Quizplus · Accepted Answer

Stocks owned by a company are classified as a current asset because they are financial instruments that can be easily converted into cash within a year or within the operating cycle of the business.

Coletta Is Preparing the Balance Sheet for Zebra Athletics