A company that produces pharmaceutical drugs is preparing a balance sheet. Which of the following would be most likely to be considered a long-term asset on this balance sheet?

Question

Quizplus · Accepted Answer

A patent for a drug held by the company would be considered a long-term asset as it represents the legal right to exclusively produce and sell a particular drug for a certain period of time. The inventory of chemicals used to produce the drugs would be considered a current asset as it is expected to be used up in the near future. Commercial paper and cash reserves would also be considered current assets, as they can be easily converted to cash within a year.

A Company That Produces Pharmaceutical Drugs Is Preparing a Balance