If Liabilities Are Disclosed as Current on the Basis of the Entity's

question 46

Multiple Choice

If liabilities are disclosed as current on the basis of the entity's operating cycle,and this cycle is greater than 12 months it should:

• A) adjust the statement of financial position for a 12 month period.
• B) disclose the length of the operating cycle.
• C) apply the 12-month test.
• D) None of the given answers are correct.

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Definitions:

Intangible Assets

Non-physical assets that have value due to their attributes, such as intellectual property, goodwill, and brand recognition.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.

Property Turnover

A measure of how efficiently a company generates revenue from its assets, often by comparing sales to the average value of property, plant, and equipment.

Current Asset Turnover

A financial metric that measures how efficiently a company uses its current assets to generate revenue, revealing asset management effectiveness.