What Is the Key Distinction Between Current and Non-Current Assets

question 24

Multiple Choice

What is the key distinction between current and non-current assets?

• A) Current assets will be used up or converted to cash within one year or one operating cycle.
• B) Non-current assets are assets which do not lose their value over time.
• C) Current assets always have lower balances than non-current assets.
• D) Non-current assets will not be used until the future.

---

Definitions:

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily reflect its market value.

Convertible Preferred Stock

A type of preferred stock that gives holders the option to convert their preferred shares into a fixed number of common shares, usually after a predetermined date.

Common Stock

A type of equity security that represents ownership in a corporation, granting holders voting rights and dividends.

Par Value

The face value of a bond or the stock value stated in the corporate charter.