Which of the Following Accounts Would Be Classified as Current

question 3

Multiple Choice

Which of the following accounts would be classified as current assets on the balance sheet?

• A)Accounts receivable, inventory, cash equivalents.
• B)Marketable securities, accounts payable, property, plant and equipment.
• C)Prepaid expenses, goodwill, long-term investments.
• D)Property, plant and equipment, inventory, goodwill.

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Definitions:

Discount Period

The time frame between the issuance of a bill or an invoice and its due date, often associated with a discount offered for early payment.

FOB Shipping Point

A shipping term indicating that the buyer takes responsibility for the goods and covers shipping costs from the point of departure.

Debit Memo

A document issued by a buyer to a seller to correct errors, reduce amounts owed, or return funds in the case of an overpayment.

Perpetual Inventory System

An inventory management system where updates are made continuously as transactions occur, keeping a real-time track of inventory levels.