The basis for classifying assets as current or noncurrent is the period of time normally elapsed from the time the accounting entity expends cash to the time it converts
A)Inventory back to cash or 12 months,whichever is shorter
B)Receivable s back into cash or 12 months,whichever is longer
C)Tangible fixed assets back into cash or 12 months,whichever is longer
D)Inventory back to cash or 12 month,whichever is longer

Question

Quizplus · Accepted Answer

Current assets are those which can be converted into cash within 12 months from the end of the reporting period. Inventory is a current asset if it can be sold and converted into cash within 12 months, otherwise it is classified as a noncurrent asset. Therefore, the basis for classifying assets as current or noncurrent is the period of time normally elapsed from the time the accounting entity expends cash to the time it converts inventory back to cash or 12 months, whichever is longer.

The Basis for Classifying Assets as Current or Noncurrent Is