New 55% Off on All Courses - Enroll Now! Click Here

    Question

    Which among the following criterion are required to be

    fulfilled for an asset to be classified as a Current Asset?
    A It is expected to be realized in, or is intended for sale or consumption in, the company’s normal operating cycle Correct Answer Incorrect Answer
    B It is held primarily for the purpose of being traded Correct Answer Incorrect Answer
    C It is expected to be realized within 12 months after the reporting date, or Correct Answer Incorrect Answer
    D Any one of the above Correct Answer Incorrect Answer

    Solution

    An asset shall be classified as current when it satisfies any one of the following criteria: a.    It is expected to be realized in, or is intended for sale or consumption in, the company’s normal operating cycle b.    It is held primarily for the purpose of being traded c.     It is expected to be realized within 12 months after the reporting date, or d.    It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date All other assets shall be classified as non-current .

    Practice Next

    Relevant for Exams: