Assets are classified as current or long term based on:
A) age of the asset.
B) whether the asset is a physical good or not.
C) the liquidity of the asset.
D) Whether the asset is based on fair market value or not.

Question

Quizplus · Accepted Answer

Assets are classified as current or long term based on their liquidity, or how quickly and easily they can be converted into cash. Current assets are those that are expected to be converted into cash within one year or a normal operating cycle, while long-term assets are those that are expected to have a useful life beyond one year. Age of the asset, physicality, and fair market value are not determining factors for asset classification.

Assets Are Classified as Current or Long Term Based On