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:

Compounded Daily

Refers to the process where interest earned is added to the principal daily, allowing the investment to grow at an accelerated rate due to the effects of compounding.

EAR

Effective Annual Rate, the interest rate on an investment or loan that considers compounding within the year.

Compounded Quarterly

A method of calculating interest where the interest earned over a quarter is added to the principal sum, and the next quarter's interest is calculated over the new principal.

Effective Annual Rate

The interest rate on an investment or loan on an annual basis, taking compounding into account.