Current accounts receivables are receivables that are expected to be collected within

Question

Quizplus · Accepted Answer

According to generally accepted accounting principles, current assets are expected to be realized in cash or used up within one year or the operating cycle, whichever is longer. Therefore, current accounts receivables are receivables that are expected to be collected within one year or the current operating cycle, whichever is longer. Choice A and D are incorrect because they are either too restrictive or too lenient in their time frame. Choice B is incorrect because it does not account for the possibility of a longer operating cycle.

Current Accounts Receivables Are Receivables That Are Expected to Be