Which of the Following Should Not Be Considered as a Current

question 17

Multiple Choice

Which of the following should not be considered as a current asset in the balance sheet?

• A)Instalment notes receivable due over eighteen months in accordance with normal trade practice.
• B)Prepaid taxes which cover assessments of the following operating cycle of the business.
• C)Equity or debt securities purchased with cash available for current operations.
• D)The cash surrender value of a life insurance policy carried by a corporation, the beneficiary, on its president.

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Definitions:

Asset

An item of value owned by an individual or corporation that is expected to provide future economic benefits.

Adjusting Entry

A journal entry made in accounting records to update the book values of certain assets or liabilities to their correct amounts.

Principal

The original sum of money borrowed in a loan or the initial amount of investment before any earnings or interest is added.

Interest

The charge for borrowing money or the compensation paid to a lender by a borrower for the use of borrowed funds.